home loan with score of 498?

Question

I have been working on my credit and i can't seem to get the score to go up. I have 1 credit card which I pay on time every month, a car loan again on time every month and was only late 1 time like a year ago, student loans i pay every month. I can't seem to get the score up. Any ideas about possible home loan qualifications? I've heard that buying a home increases your credit score, and i think it will be better than renting, any suggestions?

Answer 1

You may be able to get a loan....but you will have a super high interest rate....you should really wait until you are at least in the high 600s or 700s before taking out a mortgage.

Continuing building your credit....it make take many months or a couple of yrs. Something must have happened that made your score that low.....check your credit report each yr to make sure they are not making any errors.

Answer 2

With a 498 score your odds of getting a home loan are slim. You'd need to qualify for a subprime loan and even if you had all the income documentation and a 20% down payment your interest rate would be incredibly high. Try working on your credit some more and renting a while. It sounds like you do not have many account open. I'd try opening another credit card, use it rarely (i.e. every 6 months) and pay it off each time it's used. THis will help lower your debt ratio with the credit bureaus and give further evidence that you are a responsible citizen with your money. keep paying your bills on time and slowly it should start going up as you have a longer credit history.

Answer 3

Well I am a credit specialist at my company and would like to share a few things with you. Your score is made up of a mix of things. You have a car loan and student loan which is part of the mix, but you only have one credit card. The magic number is three but having two cards is ok. When you pay off your credit card each month that is great never carry a balance if you do may sure it is only 30% of your limit. If you have a capital one card you are severely hurting your credit, they do not report your limit and on your credit report you will always appear and maxed out which dramatically lowers your score.
Another factor is how long you credit cards have been open, if it hasn't been that long you should ask a relative if you can be added as a authorized user, you don't need to use the card just want their card to be reported on your credit report. Make sure that they have a clean payment history and don't carry a balance and if they do make sure its minimal.
Also inquires hurt your score too so don't apply for tons of credit cards. Instead research them online first then apply for the one you want. If you are shopping for a mortgage you have 30 days where the different companies that you may inquire to, if they all pull separate credit reports they will only count as one.
By adding some more to mix of credit you have your score should go up.

Answer 4

First, that "only late 1 time" is bad and really hurts your score. You are going to need at least a 2 year consistent, on time payment history.

Second, are you carrying a balance on that credit card? Pay it off. A big part of your score is the debt to available credit limit ratio. If your credit card is more than 50% of the credit limit, you are killing your score. Never go over 30%. Paying in full is even better.

Get a copy of your credit report (AnnualCreditReport.com). If there are errors, dispute them with the credit bureau. If you have negatives, work on clearing them up.

A second major credit card, which you keep paid in full every month, will probably help your score. But I think you really just need to build more history.

While you're waiting, start putting aside money every month toward a downpayment.

Answer 5

Can you get a home loan, and should you get a home loan are two seperate things.

Studies have shown, that nearly anyone can get a mortgage if they hunt around enough. There is always some desperate lender looking to rip off someone with poor credentials.

498 is very low however. 99% will reject you these days unless your income is very high. If you do find that one who will approve you, they are going to charge you awful rates. You will be much better off renting until your score gets closer to 600.

Answer 6

Not even a sub prime lender (most of which are out of business) will touch this. Yes you are on time but what deficiencies on on your report if there are many they will not fall off for 7 years. Get a copy of your credit report and see what is causing this

Answer 7

you can get a FHA loan with scores down to 400.
You cant have any credit lates in the last 12months....and you will need 2.25% down payment.

Mortgages are a huge plus on a credit report