I want to buy a house soon. My TU fico score is 581 and my eq fico score is 545 and EX fico score is 563. What is the bets way to increase the fico scoe? What kind of credit cards I can appy for to re-establish the credit history.
The fastest way is to pay off any debt owed. 30% of your score is credit utilization, so if you owe a lot more than your available credit (including amount owed that has been charged off), you will really get hurt on your score. Even if you pay off the debt, it will take 60 days for the CRAs to reflect the changes. You may need the services of a mortgage broker that does rescoring. They will be able to get an updated fico score for purposes of mortgage qualification very quickly (a few days) but it is going to cost you some. Getting new credit is not a quick fix.
Right now I would just chill with that. But I think the best piece of advice I can give is, to print out a copy of all three of your credit reports and bring them to your local bank mortgage lending department and sit down with a mortgage lender and have him look it over and see what advice he can give you on what THEY look for in obtaining a mortgage with the best possibly rates. Racking up credit cards is not the best option.
You should be able to easily get approved for an ARM with those scores with 10-15% down. The lender will use your mid score at its basis for setting rates and such. My question to you is do you have any collections or other baddies on your report?? If not you maybe able to go Fannie Mae.
There are still alot of sub prime lenders out there but you have to ask yourself are you ready to buy a house with a subprime lender? What's your time line? Can you hold off a year or so and to get your credit scores up and you Debt to Income ratio lower? With your scores you will most likely get approved by someone somewhere out there but can you live with the terms you might get offered?
Those are just some of the questions you have to sit down with your sign. other if you have one and decide on. This is more than likely going to be the largest and most important purchase of your life and are you ready for it? Are you ready for the unseen cost's of owning a house. The boiler breaks down, no landlord to call. Property taxes, water bills, school taxes etc.
I'm not trying to discourage you or anything, I'm just hoping you are prepared and done all your homework on how the home buying process works and all the cost's that go into it and everything. I think if you look at the foreclosure fiasco and the sub prime lending burst that has happend this past couple of years, you'll find that many of those home buyers weren't ready to buy a home and we caught up in some horrible mortgage terms because they weren't in position to obtain a mortgage with a prime lender.
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