Hello everyone :) My husband & I have two children & a couple years ago he lost his job so we had to move into my dads house & we've been here ever since. It's becoming VERY stressful and almost like I can't even take another day lately. We've been trying to get a house for some time now, but my husbands credit isn't high enough. We've been doing many things to get his credit score higher and I believe we've been doing a great job. He had a judgment of $5,550 on his credit that we just paid off. Not sure if that will make his credit score go up, but either way, it needed paid off. We've also got secured credit cards because a mortgage lady told us that would help. We've paid it before the due date each time. Does anyone have any advice on what we can do to make this QUICKER? His credit score 2 months ago was 549. He needs a 620 to be able to get a mortgage loan. Any advice at all would be so greatly appreciated. Thank you :)
I found someone who I think was in a similar situation, and called Dave Ramsey for advice:
Click Play under "You're in No Man's Land"
http://www.daveramsey.com/index.cfm?event=askdave/&in...
Here are some other articles from Dave Ramsey's website that you might find helpful.
http://www.daveramsey.com/article/how-to-buy-a-house/life...
http://www.daveramsey.com/article/the-truth-about-real-es...
Very best wishes!!!! :)
Again, check out Dave Ramsey. He offers good, honest financial advice. Buying a home may not be in the cards for you right now. Pay off the credit cards, down-size any vehicles, save your cash. If it is impossible to continue your current living situation, rent for now and save for a home.
As some have mentioned, time is your friend. Keep making your payments on time, and pay everything off that you can. Why not rent for a year so you can continue to work on your credit AND continue to put money aside into savings? The more money you can put down on the house, the less the lender will be concerned with your credit. If you can put more than 20% down, the lending process will be very easy for you, and you won't have to pay PMI insurance. If your main goal is to get out of your dad's house, you can do that right now with his credit as-is if you rent. And that's one more set of on-time payments you'll have to show your lender. :)
Hey there!
I used to be a mortgage loan officer, so I can try to offer some help.
The judgement was a good move on your part, and it WILL help!. To get a mortgage, you can't have any open judgements.
As for his credit...Don't worry too much right now if you have any medical accounts. Medical bills are ALWAYS an exception to the lender. They do affect your score, but you typically won't get denied a mortgage because of them. With his open, positive accounts~use them, pay them off. Keep any & all open accounts under 50%. They don't want to see you using more than you can afford. Secured credit cards are a good way to help boost your score, if you don't have any open, positive accounts. We worked with my husband's credit & we got his score from a 527 up to a 674 in 3 months!! When you do pay off any negative items, pay them over the phone, get a confirmation number & tell the creditor you want something IN WRITING stating that the account is paid in full & satisfied. Every 30 days, send a copy of that letter to all 3 credit bureaus, along with a letter requesting that they update your reports to reflect accordingly. Suprisingly, they will do it!! Do NOT keep running your credit. You don't want too many inquiries. However, multiple inquiries for a mortgage loan will not affect your score as they are considered comparative. If you have a lot of open debt, such as collections, maybe consider talking with the creditor & see if they will accept a settlement offer to pay the debt off. Not everyone will. It does help much more to have them paid in full, but satisfying the debt is always a plus!!
But, keep in mind, it does take time. Like I said, send those letter to the bureaus. Keep on top of things!! It can go quickly, or it can take a while. Just do your best to do what you can.
If you'd like any more advice or info, feel free to send me a private message!
Good luck
J.
Time is the main thing that will help. Banks want to see a solid history of responsible, on-time payments and while two months is a fantastic start and you are to be commended for that, two months isn't really a demonstration of 'history'. I know it can be hard to wait, but it might be your only option. In the meantime, just keep saving for the deposit, the down payment, and the closing costs. You'll be glad you did!
Credit is an American myth.
Don't fall prey to the "credit card to build credit" school of thought.
Most people don't know that you can obtain a mortgage if you have NEVER had a credit card in your life. All you need is proof of on-time or early rent payment.
I have 2 pieces of advice for you.
1. Pay off ALL outstanding debts/judgements. Then let some time pass & Save, save, save for a 20% or more down payment on a house.
2. Are you familiar with Dave Ramsay? He has books for very easy to understand financial planning/money management and NONE of it involves the use of credit cards. Get his book from the library for FREE.
Make sure you have an emergency fund so that a job loss does not = financial tragedy for you in the future. Make sure you are in a good position to own a house--otherwise rent until you can! Good luck!
So I think all of the advise so far is great! Just want you to know it takes a lot of patients whatever you do, don't waste your money on trying to "fix" the credit. There are alot of free resources out there! Definitely save for a down payment! That for sure helps. If you are desperate to get out then I suggest renting something inexpensive for the mean time because it will take time. Like previous advise, keep things in writing as you payoff things. Get the addresses to all the three credit bureaus. Also be presistant and be on top if it. If not already, subscribe to fcr.com and check on your score monthly. Also negotiate the price to continue the service. When talking to anyone over the phone take notes and get names and numbers to each individual. Make copies for your record and also write dates etc. The key thing is patients. But you will see the number increase for sure. Your debt to ratio is very important as well any late payments. You want to make sure you keep up with hard inquiries as well and dispute anything that isn't correct. Even if it's an account that was opened with you two together, if he wasn't primary, it can be disputed. Having two or more major credit cards also helps. When you start establishing good credit history with creditors, they raise your limit which helps ALOT! Good luck :)
Lovemy2boys,
Sound advice already posted. :)
Things I have learned:
Every time you have your credit report pulled your credit rating takes a hit. Crazy right? But true.
Medical debt doesn't freak out most lenders.
Late credit cards payments, or any late revolving credit debt, will hurt your score. This includes car payments.
After you successfully purchase your home, your credit score will fall! mine dropped about 25 points from the day I purchased to 6 months later, my lender explained this is standard as you have just gone into debt. This warrants another; Crazy, right?
Wait about 2 months, ask your mortgage lender to pull your credit report again, and make sure that judgement is marked off as paid. Keep a copy of your payment receipt so if it is not marked paid on your report you can begin to "harass" the payor into reporting it as paid.
If you are a first time home buyer look into down payment assistance programs. Local non-profits may be able to direct you to one, also ask your mortgage lender. Look into FHA loans for 1st time home buyers.
Consider a lease to own option on a property. Some sellers are willing to do this to ensure a qualified buyer after a year or two. Also, with so many homes being threatened by foreclosures, some sellers are more motivated for this option. Do look at foreclosed and short sale properties - they are usually listed for less. Go ahead and talk to a realtor now to see is these are available in your market.
Okay, that is all I can come up with now.
Good Luck
God Bless
You can't undo the past. don't fall victim to the credit scams that tell you they can clean up your credit score.
Review the credit score for any inaccuracies. If you find them - you can fight them YOURSELF without paying someone to do it for you. You are allowed one free credit report per year - you can also receive one if you have been denied a credit card or a loan. Get it. Sit down and review it item by item.
if you find an inaccurate accounting of something or a report that is not yours - you have the right to dispute it.
The best way to improve your credit score is time and:
Pay your debts on time
dispute any and all inaccuracies that lower your score
