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Asked by Zipper10, Jacksonville, FL Mon Mar 12, 2012

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Answers

11
Rob Burns- Y…, Agent, Jacksonville, FL
Mon Mar 12, 2012
These answers are all correct, the misconception is we all start out with high credit scores and if we dont rack up credit and miss payments we should keep that good score. Credit is actually earned with numerous tradelines of ontime payments for years. Having a car loan for over a year or a few credit cards with low balances always paid on time are stong builders on your credit. Paying down your current balances will probably be the quickest way to jump up your score. Plus it will improve your debt to income ratios when qualifing for a home.
3 votes
, ,
Mon Mar 12, 2012
My bet is a high credit card balance, even a small credit card say a $100 limit that is maxed out (above 75% of the limit) will crush your score.
2 votes
Keith & Kins…, Agent, Verona, WI
Mon Mar 12, 2012
The link below will give you some tips on improving your credit as well as explain what makes up your credit score. A couple things that could help;

1) Pay down your credit cards, you don't want to be close to the max limit.

2) Ask your credit card company to increase your limit, but DON'T add more to the balance. This will help your credit utilization ratio.

3) Adding more credit cards or department store cards, could hurt your score temporarily, but improve it over time. Although, since you are currently carrying a $6300 balance. I'd steer clear of adding more credit cards to the mix. It will be too tempting to add to your amount of debt.

As Dave Ramsey puts it, a credit score is an I love debt score. The more debt you've had and paid on the better your score usually is, but I'd prefer just not having debt. So get that credit card paid down.
2 votes
Eric Cavanagh, Agent, Jacksonville, FL
Mon Mar 12, 2012
No credit is better than bad credit because you can establish credit with some directed effort. The common denominator is time. Scores can go down quickly but only go up slowly. The combination of factors that the credit bureaus use to determine your score is called an 'algorithm' and is based on your available credit, your payment history, how long you've had credit, how often you've applied for credit, and how you pay your bills.

Unfortunately, it takes credit to get credit, even if you don't use credit! We all can agree that it's best not to have debt, which is what happens when you borrow or when credit is extended to you. "The borrower is servant to the lender" is a biblical statement that contains much truth. But having 'good' credit can save you hundred of thousands of dollars on a mortgage and is even necessary when you apply for certain jobs.

If your credit is marginal, if you don't have much of a score or if you're just trying to improve your score without having to open a credit line, you can go to a credit union and open an account with a $500 deposit. Ask them to give you a $500 loan using your deposit as collateral. Since they are a credit union that are only obligated to their members, most will do this without a credit check and you'll walk out with the same $500 you walked in with. Use a 6 month or 1 year term and your monthly payments will be low and interest on the loan will be insignificant. If you have any doubts about making the loan payments, deposit the money back into your savings account and arrange for automatic payments so you'll never be late. It'll cost you some interest over the term of the loan but they'll start reporting your on time payments within 60 days and you'll get an ongoing bump in your score. The net result is a forced savings program (and an increased score); after the year you'll now have $1000 in your savings account that's all yours!

To augment this strategy, repeat at several credit unions and after paying off the loan ask for a cash secured credit card. They'll issue the card without a credit check with a limit equal to your savings account. Use the card to pay your utility bill or for gas for your car and send the check in on time each month. They'll report to credit and now you have another credit line open with an on time record. After 6-12 months, ask for an unsecured card this time and although they'll pull your credit for the application, your on time record will virtually guarantee the card and the responsible habits you've developed should keep this credit in perspective and under control.

To address the inconsistency between your scores, realize that 40% of credit records contain errors so it's important to be proactive about your credit (as above) as well as your score. Understand that most creditors don't report to all three bureaus and many only report to one. Contact the the 3 bureaus and get your free report (each bureau will give you a free copy once a year) and address any errors by using the error correction procedures outlined on their websites. If you have any difficulty or questions in this area, contact your local credit counseling center; they are usually some type of public agency and should not be charging you for the service they provide (although they may accept donations). Hope this helps. If it has, click on 'helpful answer' (thumbs up).
1 vote
, ,
Mon Mar 12, 2012
Hi Zipper10,
You have rec'd some good answers here, and strange as it seems, too little credit can be as bad as bad credit. Do not despair, find a good loan officer and I am sure they will be happy to help you build your credit quickly. I see many recommend local, but these days most things are handled by email and phone, just find a loan officer, interview them like you are hiring them for a job, then choose the one you feel best about!
Best wishes, Jim
1 vote
Antonio Vega…, Agent, Saint Cloud, FL
Mon Mar 12, 2012
Make sure your credit card, in addition to being paid on time, never carries a balance of more than 30% it's maximum.
That is if you have a 10,000k limit it should never exceed 3,000 in usage. It is better to have 2 cards kept at below 30% than 1 kept at 60%. Was this answer helpful? If so please click on the "thumbs up" or the "best answer".

Tony Vega
Charles Rutenberg Realty
1 vote
Zipper10, Home Buyer, Jacksonville, FL
Thu Mar 15, 2012
Thanks to all for taking the time to answer and give me GREAT information.
To clarify, $5200.00 is what is still owed on my car that was financed for $23k.
Neither the car or credit card have ever been paid late or had a missed payment, but my CC balance was obviously higher than the suggested 30% balance. I have taken all of your advice and paid my CC to a zero balance. I hope this will help boost my score some.
0 votes
Alma Kee, Agent, Tampa, FL
Thu Mar 15, 2012
Yes a lot of good answers already but my guess is your $6,300 debt is credit card debt and above 30% of your available credit. So you need to economize and pay down your credit card below 30% of the credit line. So if your credit line is $10k then you need to get it below $3k. If your credit line is $7,500 then you need to get it below $2k. It may even make sense to borrow from a 401(k) to pay down your credit card balances to boost your FICOs.

Also if you are a first time homebuyer and once you get your middle score to at least 620 you may be able to get up to $7,500 to be used toward your downpayment and closing cost. To see if you can qualify and find an "approved" lender, go here:

http://apps.floridahousing.org/StandAlone/FTHBWizard/FTHBWiz…

All the best,
Alma Kee
http://www.SoldOnTampa.com
813.244.9898
0 votes
Scott Godzyk, Agent, Manchester, NH
Mon Mar 12, 2012
What buyilds a credit score is paying on time and keeping your balance owed under 50% of your available credit limit is. When you have credit with someone for a long time and adds to your credit score so you should not close accounts. You should meet with a local and trusted loan officer and get prequailified at no cost, they can guide you through teh process and give tips to anything more you should to do.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Kevin Hart, Agent, Plano, TX
Mon Mar 12, 2012
Dear Home Buyer,

We would suggest talking to a lender directly. We are affiliated with Prime Lending Ventures and you can call Michael Gayda at 904-394-1420. He can help explain that information and at what price range for a home you would qualify.

Please let us know if we can be of assistance in your home search. Best of luck to you!

Kind Regards,
Kevin and Celeste Hart
Magnolia Properties of Jacksonville, Inc.
0 votes
Zipper10, Home Buyer, Jacksonville, FL
Mon Mar 12, 2012
Sorry my Transuion is a 584.
0 votes
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