Home Buying in Buffalo>Question Details

nini61510, Home Buyer in Amherst, NY

My current credit score is 525. I have 3 credit card bills that will be paid in full within the next 3 weeks.

Asked by nini61510, Amherst, NY Thu Jan 31, 2013

After that i will only have school loans that i am current with on my report. How long until i will be able to pre-qulify for a house? and will i even be able to?

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There is hope for you as a future financially responsible individual. It just may take a while...

Important to note is that fact that rebuilding your credit score is directly tied to paying your bill in a timely manner. Additionally, paying off all of your credit cards could be counter productive. Consider keepin one open card open hat you use responsibly and make payments on as scheduled.

Good luck,

Bill
0 votes Thank Flag Link Thu Feb 21, 2013
It really all depends how you handle your credit cards, utility bills, rent, car insurance etc. If you pay the credit cards in full, use them every once in a while to keep them active....ONLY for things you have the cash to afford credit use is a good thing to build your credit.....but you only use it essentials that you could use cash on.....pay them off immediately.

You MUST have credit cards to build credit. Last December (2011) my credit score was where yours is. It is now up to 663. I did this by paying all of my bills on time AND getting old and INCORRECT negative trade lines off of my credit report.

If you haven't yet, check your credit reports!!!....get rid of old collection stuff if its there. Collections if you have them, can be removed sometimes using a debt validation letter (google validation letter....lots of examples you can use) ALSO make sure all of the info on your reports are correct, and that everything is yours....addresses, SS# EVERYTHING!! I had 2 addresses that were NOT mine.....never lived in that place.....

Hope this helps.
0 votes Thank Flag Link Thu Feb 21, 2013
For a personalized answer visit with any licensed loan officer; if you don't yet qualify, at least you'll know what needs to be done; be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously
0 votes Thank Flag Link Thu Jan 31, 2013
nini,
Congratulations on paying off your credit cards! I don't think anyone can put a time frame on your question, but I can tell you how to speed up the process.
First, don't close any accounts. Sometimes people believe that by closing an account once it's paid for that will help, but the opposite is true. Closing accounts limit your available credit and will lower your scores.
Next, continue to use your credit, but only for items you would otherwise pay cash for and pay them off every month. Credit is like a muscle, it must be used to get stronger. If you put the cards in a drawer and forget about them, little will happen to help you.
Pay everyone on time or early. One of the worst things you can do while trying to improve your scores is to have new late payments. If you need to set up auto pay with your bank, just don't forget to pay off the cards every month.
Next, save up all the money you can. Down payment and reserves (money left over after the down payment) goes a long way to get a loan approved. If someone is barely scraping by month to month, it only takes a couple of bad events to wipe out all your progress. Cars need maintenance & repairs, people get sick and miss work and run up medical bills, surprises are only surprises if we don't plan for them. By saving some money you will be prepared for that rainy day and if it never comes, you'll have a nice down payment for when you are ready.
Getting your credit scores (there are 3, banks use the middle one) is only one aspect of being ready to buy a house. Down payment and reserves are another but job stability is huge.
The longer you can stay with an employer the better it will look. If you do change jobs, the best thing is to stay in the same field and get paid more in the process. If you change to any position that has bonus or commission income, this will not count right away. Banks want to see up to a 2 year history of earnings before they will rely on this income.
I hope this has been helpful. Continue to do the right things and you may get qualified sooner than you think. Meeting with a local lender as the time nears, even before you are ready would be another good step to measure your progress and fine tune your steps.
0 votes Thank Flag Link Thu Jan 31, 2013
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