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I would recommend to anyone who doesnt have credits to get a secured credit card from any Bank to help built your credits. Also make sure you only spent 70% of your credit limits. It very important.
No. Make sure you carry no revolving balance. It isn't what percent of your credit limit you spend, it is how much you pay it off.
When I was younger I told a financial planner that I charged everything on my credit card. He was mortified. I asked him what the problem was because I paid the thing off to zero every single month. He was baffled. I used my card, got my rewards, and didn't carry a stupid balance.
If you are ever even remotely inclined to carry a credit card balance, cut the card up so you can never ever use it. The loans carry extremely high rates (for most people, mine are under 9%, but I still don't use them). The interest payments are not tax deductible. Paying credit card debt is literally worse than waking up in the morning and punching yourself in the **** every day. If more people did that, at least they wouldn't have kids they couldn't afford.
Im looking to buy a house next year, but my credits is not so good. The last time I check it was 590. I cleared all my collections dept except one which is $700.00. I want to pay that off soon before I buy the house. I want to get my credits up to 680 at the least. Im just not sure how long it'll take to get to 680 or 700 but I really dont want to sign another year least. Am I being impatient? Any thoughs?
Go through your report in detail and see if there are any items you can challenge or get removed. it doesn't hurt to see.
don't get yourself into an expensive mortgage just because you don't want to pay rent.
Then you need to keep saving. Also if you put down less than 20% you will be subject to PMI insurance on the mortgage, which will run another $100.00 a month and not be tax deductible.
You really need more savings. When buying a house there are tons of other expenses. After moving into a new construction home 10 years ago, I spent at least $10,000 on ancillary stuff like wood blinds, automatic garage door opener, furniture...... It all adds up.
Not that I'm supporting paying PMI, but PMI is tax deductible if your income falls under a certain amount. I don't know what that amount is though.
To the OP:
you have $6,000 saved, but a $700 delinquency that's dinging your credit score.
Pay off the $700 immediately. Then, make sure if you're using credit cards that you have a $0 balance by the time the statement is generated. This will lower your credit utilization in any given month, and help start to bump up your score. when it's above 650, then you're substantially closer to being able to buy a home with the better rates. i suspect by then you'll have more than the $5,300 saved as well. Your goal should be to have a 20% down payment.
Ans as this posted said - you'll spend money when you first move in almost definitely.
Wow! Your situation was exactly like me last year. Last year, October 2013 I had a low score of 586. I focused on paying off all cc debt (which I have!) and over time it gradually increased and I received 2 cc credit limit increases. I kept a record of it actually (I'm a nerd I know!).
For me, it took 1 year, but for you it could be sooner as YMMV. Here's my advice:
1) Focus on paying down your debt of $700 as soon as possible (for me, it meant getting a second job so you may want to consider it. Plus, the second job will come in handy with the down payment )
2) Sign up for myFico.com and Experian.com and stay on top of your scores like it's nobody's business. If anything is off you want to be alerted immediately.
I plan to buy a home in about 4 months so I am looking to have it in the mid 700s ideally. Anyway, I hope that was helpful to you. It's good that you are starting out a year in advance. That is plenty of time to get your score above 700.
GOOD LUCK!
This is all great but I wouldn't advise for paying a monthly amount to simply get your FICO score. that $10, $15, $20 per month is better put into savings towards the down payment. then there are a variety of ways to get your score for free when you want to check it.
I just wanna share this important tip for someone trying to fix their credits, I talked to a guy from transunion about my credits score two months ago because it droped by 40 points in one month for no reasy as I thought. After he checked my account, he told me it went down because I used 85% of my available limit. He say I need to leave 30% of my credit limits in the card at all time. I had no idea..I was kinda upset when my score droped but now I know how they work. So last month and this month I only used 50% of my limit and now its going up again fast...greatest feeling ever..
yes! very good advice that he gave you. basically, what matters is the "balance" at the time your statement is generated. so if you're really trying to get your score up, just make sure you pay as you go.
for instance, the way i manage my credit card is by paying it every 2 weeks, when i get my paycheck. i charge everything to earn the cash back rewards, so then i pay it with my own cash, just as if i was paying for things every other friday out of my checking account.
i track everything i charged in excel, and tick it off as paid on friday when i submit the payment.
by the time my statement is generated, i seldom have much of a balance.
yes! very good advice that he gave you. basically, what matters is the "balance" at the time your statement is generated. so if you're really trying to get your score up, just make sure you pay as you go.
for instance, the way i manage my credit card is by paying it every 2 weeks, when i get my paycheck. i charge everything to earn the cash back rewards, so then i pay it with my own cash, just as if i was paying for things every other friday out of my checking account.
i track everything i charged in excel, and tick it off as paid on friday when i submit the payment.
by the time my statement is generated, i seldom have much of a balance.
I do the same in terms of payment. it's easier for me to track and reconcile with each paycheck that comes in rather than waiting for a monthly statement. But I track everything through my bank which pulls in all my accounts similar to mint.com. It auto-updates and I can quickly see my assets vs. liabilities.
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