Financing in Liberty>Question Details

Kyle Payne, Home Buyer in 77575

How can I raise my credit score 59 points at a decent rate based on my credit history I have listed.?

Asked by Kyle Payne, 77575 Wed Mar 13, 2013

I would like to have my score up to at least 620 within 6 months if it's possible. My mid score is 561. I have 1 auto loan open now. I have had 6 different installments on my credit in the last 8 years that are paid in good standing. I have never had any type of revolving credit. I have 6 derogatory marks on my credit report (5 of which are medical and one is comcast bill from 2007). I have had 4 late payments on installments in the past 2 years (due to medical emergencies). I have been told that I don't have bad credit, I just haven't established enough different types of credit. I have also been told that medical collections don't impact my credit enough to drastically lower my score and the comcast bill is too old to worry about so don't worry about paying them.

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It sounds so very tempting to transfer balances to a low card and nearly max it out. Be wary of this tactic as it could your score lower as you are over the 30% minimum. This is a biggie as it is 30% of your score.
Pay Down, Pay Down, Pay Down your balances, See above…30% is max you should use on cards.
Another way to the spread on your card is to request a credit limit increase so you have to layout less cash to make the 30% limit. BUT, and this is the biggie, Do Not USE your New CREDIT Limit. Keep it open.

Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com
0 votes Thank Flag Link Fri Apr 12, 2013
http://www.creditrepairpublishing.com/credit-repair-articles…

The above strategy works.... And is not some scam.
Removing the medical collections will help you the MOST.

Are you married? Can a spouse add you to a credit card they have?


Tom Burris
Mortgage Banker
http://www.servicefirstmckinney.com/
(214) 763-4629 cell/text/nights/weekends(Really!!)
tburris@servicefirstmtg.com
Lending all across the entire Great State of Texas!!
NMLS# 335055
Search Dallas area MLS for FREE. No registration => http://www.ntreisinnovia.net/cgi-ntr/BR_login?0501134
0 votes Thank Flag Link Wed Mar 13, 2013
Pay down your loan amounts .. Open another charge account. Try to get the largest amount of available credit possible. Then do not run up the credit. Your score will drop a little at first but then go back up
0 votes Thank Flag Link Wed Mar 13, 2013
Sounds like you are getting some bad advice, collections are always an issue, FHA issued an ML last year saying no loans can be closed if there are any outstanding collection, let alone multiple ones. They rescinded that rule shortly after, but that is where they want to go so plan ahead. Our current guideline says no more than a total of $1,000 in collections, no liens or judgments. Think about it, what if you are lucky enough to get in a home and then a collection account gets aggressive and manages to grab all of the money in your checking account? Then you can’t make the mortgage payment. If you were a creditor and one of your collection accounts buys a home would that make you want to be more aggressive? It is a signal to the creditor that you now have something to lose. This is why lenders do not like collections - they want you to win. They do not want to see the deck stacked against you from the get go. Do you?

Your score will probably not rise that much in 6 months without some aggressive action on your part. I would open at least 2 revolving accounts, keep the balances less than 25% of the limit on the card, that means EXACTLY what I said, never go above 25% of the limit on the card even if you pay it off every month.

I linked below to a page on my site that shows how to handle collections, the little book mentioned at the bottom of the page is something I prepared for my clients, sounds like it will help you as well.

Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Wed Mar 13, 2013
You should set up a revolving account. Here is what you need to do and also how to achieve the maximum benefit. Got o a bank and tell them you would like to set up a secured credit card. This card needs to be reported to the credit bureaus or you are wasting your time.

Once you find a bank who can do this you will need to deposit money in a CD with them most likely. This will be your credit line. I would recommend doing at least $1000 for this. You can always get the money back and close the account if necessary.

Once you do this the next step is just as important. Never, ever, ever charge over 30 to 40% of your available credit in any given month. You do not, I repeat, you do not have to pay it off in full every month but always keep the balance below 40%. Ideally in your case I would recommend not going over 30 to 35%. The benefit if paying it off in full will be the elimination of financing charges which is a very good thing but it won't help your credit. When your credit is pulled it shows a snapshot in time. So even if you pay it off in full you will show whatever your current balance is.

There is a large portion of your credit score that is based on your revolving history and the percentage of credit utilized. The older your revolving accounts are the better. So never close this account. Eventually in a year or so you will be able to convert it over to a non-secured account.

If you do this and keep paying on all your accounts in a timely manner you will get a bump in your credit. You can also ask a friend or family member to add you to an established credit card they have. They don't (and shouldn't) give you the card. Just add y you as an authorized user. Make sure they do not have a large balance and pay the card on time or this option will not help and can actually hurt you. A nice older credit card with a zero balance and higher credit limit will definitely help your credit scores and add to your available revolving credit which lowers your total credit utilization and thus will improve your scores.

I hope this helps. Best of luck to you!

_______________________________________
Don Groff
REALTOR® & Mortgage Broker
Austin Real Estate Pros | 360 Lending Group
office: 512.669.5599 mobile: 512.633.4157
websites: http://www.AustinListed.com | http://www.360LendingGroup.com
email: listings@dongroff.com
0 votes Thank Flag Link Wed Mar 13, 2013
I have been dealing client's credit issues for over two decades. The process is pretty straight forward, the auto finance, home mortgage, and consumer credit lenders all have different credit models hence the difference in credit score depending on who runs your credit. Your lack of credit IS your problem. Since you have elected not to have any revolving accounts your credit scores will not break over the 640 mark due to your past late payments for at least 12 months. My recommendation is read my article about credit and better yet improving your scores. I know if you follow my advise you will be in the running to buy a home in 3-6 months. But you have to start today.

Best of Luck!

http://www.trulia.com/blog/george_raymondo/2012/03/no_credit…

http://www.trulia.com/blog/george_raymondo/2011/11/can_i_buy…
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Wed Mar 13, 2013
When buying a home it is not just the score you need to wory about. It is also what types of negative issues that will have to be compensated for or explained away. Credit has changed a lot over the last couple of years and how to properly improve it for specific purchases is becoming very specialized.

I suggest you talk to someone who does credit counceling to help you meet your goal of purchasing a home in six months. One company I have recently have come into contact with is Credit Nerds.

There is charge but it is not upfront and they are about helping improve your credit .. not do a quick removal job where the negitive credit issues come back in 30 days.

Call 877-614-6373 and start a credit audit with them to see if they are right for you. To get $50 off thier charges give them Code IRV-01.

Best of luck in you future home purchase ... Bruce
0 votes Thank Flag Link Wed Mar 13, 2013
0 votes Thank Flag Link Wed Mar 13, 2013
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