Samanthanjer…, Home Buyer in Chisago City, MN

How can I increase my credit score. Median score of 580 and need 640 to be a first time homebuyer.

Asked by Samanthanjerry1124, Chisago City, MN Sat May 4, 2013

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11
There are several ways to increase your scores but 580 is the minimum required score for an FHA loan. Have you tried The Lenders Network? They help people with lower scores like you get approved by referring you to lenders that can help with a 580 or higher score. They have helped a lot of people in your shoes so I would start there. Good luck to you
9 votes Thank Flag Link Mon Jan 6, 2014
Good evening Samanthanjerry1124,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
http://www.consumer-action.org/

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
1 vote Thank Flag Link Mon Aug 5, 2013
1. Pay your bills on time
I know it may seem commonsense, but this needs to be mentioned. The most important step in improving your credit is paying your bills on time. A recent late payment can drop your score 60-100 points, so do yourself a favor and pay on time, every time.

2. Don’t Co-Sign for Anyone
It’s difficult to say no, especially to close friends and family. But if you’re going to improve your credit, you can’t risk someone else ruining all of your hard work. If your friend can’t qualify for a loan without a co-signer, maybe they should work on fixing their credit instead of putting your credit in jeopardy. Fixing your credit is all about taking control, you can’t control whether someone else is going to pay their bills or not, so don’t co-sign for anyone.

3. Keep Your Balances Low
Don’t let your credit card balances sink you. Paying them down doesn’t just make financial sense, but also improves your credit scores. 30% of your credit score is calculated from how well you manage your credit and your available utilization rates. So pay down your credit cards and watch your scores improve.

4. Limit Your Inquiries
Every time you apply for credit an inquiry shows up on your credit file. Applying too often lowers your credit score and makes you look desperate for credit. Limit yourself to one inquiry every 6 months.

5. Be Proactive
If you have derogatory accounts on your credit report, be proactive. Don’t sit around waiting for for 7-10 years for them to fall off your credit history. Get involved, contact the creditors, the credit bureaus, collection agencies, third party furnishers.
Investigate the information in your credit reports and get everything verified, validated, checked, re-checked. Do some research, read a few books, learn about how the credit system functions, and most importantly learn your rights.

You are protected by the FCRA, FACTA, FDCPA, CROA, and many other laws.

If you don’t have the time to do all of your own due diligence, hire a reputable company to represent you and fix your credit.
Web Reference: http://www.creditfirm.net
1 vote Thank Flag Link Thu Aug 1, 2013
Home > Blogs > The Almighty FICO
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Fred Jaeger - Principal Broker's Blog

By Fred Jaeger - Principal Broker | Agent in La Pine, OR
The Almighty FICO

Posted under: General Area, Home Buying, Credit Score | May 6, 2013 1:11 PM | 18 views | No comments
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The key to getting ahead in this country used to be an education. Absent even that, at least what a person had done in life, what they had actually accomplished, was what counted. These days however, it seems that the only true mark of achievement that makes any real difference one way or another is, unfortunately, the almighty "Credit Score."
It used to be, that even during the so-called "lending crisis," there were "Stated Income" loans available where virtually the only requirement is a minimum credit score. Forget what that person does for a living, how long they've been doing it, what kind of money they make, or even if they have a job in the first place; if your credit score is high enough, you can probably get a loan.

On the other hand, even a Pulitzer Prize winner or a Nobel Laureate's loan application could be rejected if their credit score didn't measure up. That, to me, is pretty astounding. Some would argue however, that the system set up by the Fair Isaac Corporation (they were the first to come up with the so-called "Credit Score") is a fair and equitable means of determining credit worthiness, by considering the most relevant facts while disregarding other variables which might be considered extraneous.. like what you've accomplished in life.

Oh brother.
I guess even my client's Nobel Prize might be considered extraneous if he had a recent bankruptcy so the best lesson to be learned from all this is to protect your credit score at all times!

Lets look at what can be done to Improve Your Credit Score:

Check your credit via one or more of the three predominant Credit Agencies, Equifax, Experian and Trans Union often. If you haven't checked recently, you might find errors that are hurting your score. Each agency provides a place on their website where you can register a dispute. Use it.

Don't close old accounts that you're not using. Long histories, regardless of activity help your credit score.

Pay your accounts on-time. Even one incidence of over 30 days past-due can hurt your score dramatically.

Keep a small balance on your credit cards while guarding against keeping high balances relative to your credit limit. A small balance, believe it or not, is better than a zero balance. A general good rule of thumb is never to exceed a balance that is more than 30% of your credit limit.

If you run into a bind (illness, loss of job etc,) call your creditors before you get behind in order to work out a payment plan.

Checking your own credit often (a soft pull) won't hurt your score. However, if a lot of outside companies do too many checks, too often, this can hurt your credit. Don't apply for credit to a lot of creditors at once. If you're buying Real Estate, what ever you do, don't buy that new car until your transaction has closed escrow!! Many a deal's been killed by people who bought "furniture for the new house" at precisely the wrong time. Remember, that your lender might pull credit one final time before funding the transaction. (or not)
Consider getting a "Secured" credit card to establish credit. This kind of account is secured by a deposit placed on account with the issuer.

Don't apply for too many credit cards that you don't need. Having a lot of credit availability can actually hurt your score.

If you've been a good customer over the years, ask to have that one payment that you made late erased from the record. You'll be surprised what you can sometimes get by simply asking.

Don't ever ask a creditor to LOWER your credit line. The result of that will increase your debt to limit ratio, which hurts your score.

Resist the temptation to consolodate accounts into a single card, even if its at a much lower rate. The idea here is to maintain low balances on your cards instead of a high balance (relative to limit) on just one.

There's a part of me that thinks it's a little sad that the measure of a person's reliability and almost by implication, their worth to society, can be sythesized into a single number; but like it or not, in our society today the almighty FICO score apparently reins supreeme. Making sure that "score" is protected is an essential componant of modern survival.
1 vote Thank Flag Link Tue May 7, 2013
Good afternoon Samanthanjerry1124,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
http://www.consumer-action.org/

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
1 vote Thank Flag Link Tue May 7, 2013
Hi Samatha

Start by paying your bills on time.

Do not open more credit cards or take on loans

Start paying down your CCs, to below 30% of total allowed
credit limit.

Do not close any Credit Cards

Work with a Credit repair company.

good luck

Perry
1 vote Thank Flag Link Sat May 4, 2013
Check out my post at http://www.trulia.com/blog/fred_jaeger_principal_broker/2013…

I have answers as to how to improve and protect your credit score. Good luck.
0 votes Thank Flag Link Mon May 6, 2013
Samantha:

Have you looked at all three of your credit reports? Do you have debt you need to pay off? Do you have open and revolving accounts? For more help please do not hesitate to contact me.

Have a great day;

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit
Ex-Mortgage Broker of more than 10 years
http://www.everlastingcredit.com
0 votes Thank Flag Link Mon May 6, 2013
0 votes Thank Flag Link Sun May 5, 2013
We are able to go down to a 580 credit score on an FHA loan. I would need to see what is going on in your credit profile to see if we can get you approved now instead of later. Are you looking for a home in WI or MN?

Mandy Fritsche, Mortgage Loan Officer, Prospect Mortgage, NMLS# 557211
262-327-5700 Cell, 877-868-9198 Fax, mandy.fritsche@prospectmtg.com
http://www.MyProspectMortgage.com/mfritsche
0 votes Thank Flag Link Sun May 5, 2013
Hello Samantha:

We help first time home buyers like yourself in need of a little credit assistance. Please take a moment to look over our website. This is more than credit repair.. Its credit education, debt and budget help, mortgage tools that will help you understand the entire process, etc.

Have a great weekend.

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit
Ex-Mortgage Broker of more than 10 years
http://www.everlastingcredit.com
0 votes Thank Flag Link Sat May 4, 2013
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