1st time buyer

[Anonymous]

I am going to try to purchase my first home in approx 1 year. I have approx $50,000 to use as a down payment but have poor credit (562) and am trying to raise my score. I have paid off some old medical bills (that hasnt helped much) since everything I paid off still shows in the negative column of my report. I qualified for a target card and am using it and paying most of the balance off each month. Any other ideas on how I can increase my credit score? should I get a secured credit card (one that reports to all 3 credit companys) ???

[Anonymous]

If you are planning to buy a house in 1 year that's great because that gives you plenty of time to

work on your credit scores. If you do get more credit cards-don't over do yourself. Keep balances

low at about 30% of your credit limit and ofcourse always pay on time and never go over the credit

limit. Having high balances will lower your credit score.

[Tuscani]

Welcome.. Please read the Scoring 101 thread:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

[dallasjetfan]

Good luck on your purchase!! I am in the same boat, but my scores are higher at this time. I started a year and a half ago with 475 middle score after BK, now it is 653. So there is hope!! You could probably raise it anywhere from 80-125 points in that year.

[Anonymous]

wow thats great how did you do it??? Im so frustrated I paid a bunch of old bills and they are still on my credit reprot and showing as a negative I wish I would have known about this website earlier....

[Anonymous]

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caligirlonherway wrote:
I am going to try to purchase my first home in approx 1 year. I have approx $50,000 to use as a down payment but have poor credit (562) and am trying to raise my score. I have paid off some old medical bills (that hasnt helped much) since everything I paid off still shows in the negative column of my report. I qualified for a target card and am using it and paying most of the balance off each month. Any other ideas on how I can increase my credit score? should I get a secured credit card (one that reports to all 3 credit companys) ???

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Do you have any relatives with a clean credit history?  IF so you could ask them to make you a co-account holder to one of their cc that has a clean payment history.  You will gain the history on your report but you would also be responsible for payment if the primary holder cant.  Also there is always FHA which cares more about your DTI than credit score.

[Anonymous]

The first thing I'd do is deposit your $50k in a high yield savings account (ING Direct (%4.3 APY) or the like). This is a much better return than a typical bank savings account. If you only leave it in for a year you will gain another 2K assuming 4% return. If something happens and your time frame goes over one year, hey more free money. Second, If things aren't dropping off your report immediately do not panic. It takes time for creditors and other agencys to post the information to your report, and more time for your report to update. Third, I'd skip getting another card unless it's a Major bank backed card (Not Cross Country or some other "Bank" like that). You've got your Target card and if you open too many more you'll drop your average account age, which can harm your score. Fourth, When in doubt, dispute. La' ScottB400

[Boswd]

BE VERY CAREFUL apply for new lines of credit especially credit cards when going into the home buying process.   Do NOT  go hog wild.   It will hurt you not only with the inquires etc but most mortage lenders look at newly opened credit as something of a red flag.   Be smart, be diligent and be minimal in the number of cards you want to open.

[Anonymous]

I like this answer!!! Also with 50K down you will bee in great shape.

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Boswd wrote:

BE VERY CAREFUL apply for new lines of credit especially credit cards when going into the home buying process.   Do NOT  go hog wild.   It will hurt you not only with the inquires etc but most mortage lenders look at newly opened credit as something of a red flag.   Be smart, be diligent and be minimal in the number of cards you want to open.

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