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Old 08-12-2008, 07:21 PM
 
Location: Greenville, SC
469 posts, read 521,010 times
Reputation: 181

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Ive had a bit of credit problems in the past, that thankfully that is behind me. Ive cleaned up almost all my debt, have not been late on a payment in over 18 months, and at this time only have a car payment with only 10 months to pay. I am presently renting and have enough in savings for at least a 15% down payment. My credit score is at 610, besides my shaky past I think my problem is I have no available credit, no credit cards, just the auto loan.

Now my questions:
Will obtaining a credit card raise my score?
How long would it take to raise my score?
What kind of mortgage rate should I expect with a score of 610, and would a score of say 650 change the rate at all?
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Old 08-12-2008, 10:33 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,095,994 times
Reputation: 1007
FHA requires no lates within the last 12months, and they prefer that you have 3 tradelines that have been current for that amount of time.

Applying for new credit WILL lower your score at first, but will raise it in the long run (if you pay on time).

With some FHA lenders, you will need to have a 660 to have the best rates out there. Most of them are at 620 to have a pretty good rate.

Quote:
Originally Posted by jbar1 View Post
Ive had a bit of credit problems in the past, that thankfully that is behind me. Ive cleaned up almost all my debt, have not been late on a payment in over 18 months, and at this time only have a car payment with only 10 months to pay. I am presently renting and have enough in savings for at least a 15% down payment. My credit score is at 610, besides my shaky past I think my problem is I have no available credit, no credit cards, just the auto loan.

Now my questions:
Will obtaining a credit card raise my score?
How long would it take to raise my score?
What kind of mortgage rate should I expect with a score of 610, and would a score of say 650 change the rate at all?
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Old 08-13-2008, 03:34 PM
 
Location: New York
2,251 posts, read 4,161,942 times
Reputation: 1607
Quote:
Originally Posted by jbar1 View Post
.... at this time only have a car payment with only 10 months to pay. ....presently renting ... shaky past.

Now my questions:
Will obtaining a credit card raise my score?
How long would it take to raise my score?
What kind of mortgage rate should I expect with a score of 610, and would a score of say 650 change the rate at all?
Over the years as a loan officer, I would clean up peoples credit in order to get them a good loan. Sometimes it would take one month, the longest was 9 months.

Without writing a book a credit, read below to better your situation.

When your dealing with credit, one thing you need to understand Revolving debt and Installment debt.

Revolving debt - things like credit cards, lines of credit, charge accounts. These types of accounts have credit limits. You need to keep your balance below 50% of the credit limit so it doesn't count against you. (25% is better.)

Installment debt - this is where you have a fixed payment with a known end date. If you send extra into the principle over a four to six month period. The C/B will see you being more responsible and your score goes up. Start sending in an extra $50 to your car payment.

Right now you could qualify for a subprime loan with a credit score at 610, but you have time to get your credit score up. You do not want to get a loan now - rates are high (especially with you low credit score).

You should get your own copy of your tri-merge credit report, to review if you have any problems. If there is anything incorrect, you can dispute the negative items off.

When you start shopping for a mortgage - get an up-to-date copy of your credit report and mark out your SS#. That way when you speak to agents that want to see you score, you can fax it to them. You're not having your credit report run over and over again.

Here's a piece of advise that will help you if your unsure which bank/broker to go with. Order your own appraisal in your name, so you can change it to the bank you want to go with. If you let the bank/broker order it, you would have to pay for another appraisal if you decide to change banks at the last minute.

Also - you want to know all the numbers before you get to the closing table. I have heard many times from borrowers how they got to the closing table and all the numbers changed.

Good Luck......
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