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Building credit for home loan

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Anonymous
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Building credit for home loan

What steps do I need to take to build credit for home loan and how long will it take? I just became an authorized user on my grandparents discover credit card account and I have a care credit card that I will begin using tomorrow that my grandpa opened with me. Also I added my husband to the care credit card as an authorized user. So will those two credit accounts be enough to build my credit? We can't use my husband on the home loan application due to past Child Support and other past credit problems.
Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: Building credit for home loan

you need 2-3 revolving credits under your name, not AU, to generate a score.  have you check what your score is right now

Message 2 of 10
takeshi74
Senior Contributor

Re: Building credit for home loan

It's not just a matter of new accounts but also working on existing credit issues.  Definitely hit the Rebuilding subforum and carefully research before taking action to address derogs on both of your credit profiles.  Derogs tend to have the biggest impact and tend to hold one's scores down.  While you definitely want to build positive payment history you also need to address the derogs where possible.

Message 3 of 10
doc101
Regular Contributor

Re: Building credit for home loan

Being an AU will help, but you need a mix of credit accounts to really see an improvement. Positive trade lines in your name and in good standing will help


Starting Score:Equifax 543
Current Score:EQ659 TU 716 EXP677 updated 7/3/2016
Goal Score: 700


Message 4 of 10
Anonymous
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Re: Building credit for home loan

A mortgage broker checked my credit score and said I have none. No credit.
Message 5 of 10
Anonymous
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Re: Building credit for home loan

The mortgage broker told me not to pay off old depts,because that wouldn't raise my credit? But your saying that I should if it's labeled derogatory on credit report?
Message 6 of 10
Anonymous
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Re: Building credit for home loan

Hi Krista.  What we are saying is that it's hard to tell you the "right" thing thing to do because that depends on a lot of things.  These include how much negative information exists on your profile, if past debt stills exists how much, when the date of last activity is associated with each negative account, whether any of the accounts are close to falling off your report or close to crossing the statute of limitations, what your current income level is, and so on.

 

You may be in a stiuation where two things are true at the same time: (1) You have a big credit problem and (2) You want to buy a house very soon.  I have discovered that this is much more common than I would have guessed possible.  It's not that I can't symnpathize with both.  But for me, when my credit situation was a nightmare, it didn't occur to me that buying a house was an option.  I figured that I had screwed up, gotten into trouble, and that I would first have to spend a long time -- several years -- solving the credit problems, during which time I'd be renting.  And that's what I did.

 

My own personal advice is to focus solely on credit repair.  To do that effectively you will need to give up on the whole idea of house buying for at least a little while.  And most importantly you should be spending time educating yourself on how credit works.  That means spending a lot of time reading basic credit 101 stuff, e.g. the LEARN ABOUT SCORES link above, etc.  The Rebuilding forum would probably be a good place to hang out as well.

 

PS.  It's also easy to get conned into feeling I Must Buy A House!  Like that's a necessary part of the Good LIfe.  I will say that buying a house was one of the worst choices I ever made.  I bought next to tyrannically loud neighbors and then two years later the economy collapsed.  When I finally sold I had lost four years of sleep and $40,000.  Many people have a far happier ending to their home buying story.  But my point is that renting has a lot to be said for it.  Owning a house can definitely turn out to be a disaster.

Message 7 of 10
Anonymous
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Re: Building credit for home loan

Hi creditguyindixie, I only have 3 things on my report. 1is paid and the other 2 are from like 2012 .its a hospital bill and dish network. Not paid. But what do you mean by the statue of limitations may have run out?
Message 8 of 10
Anonymous
Not applicable

Re: Building credit for home loan

http://www.nolo.com/legal-encyclopedia/the-statute-limitations-ran-credit-debt-can-the-collection-ag...

 

This explains what a Statute of Limitations is (connected with debt).

Message 9 of 10
Anonymous
Not applicable

Re: Building credit for home loan

"We can't use my husband on the home loan application due to past Child Support and other past credit problems."

 

So instead y'all gonna put him on as AU?  Man Indifferent

 

I don't mean to be flippant, but as most know around here, business is business.  But if it were me, I'd like him to show me what he has in mind to get his child support current and his other issues, or is all that fixed  and just needs to age off?

 

 

 

 

Message 10 of 10
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