Credit Builder Loans

[Anonymous]

http://ficoforums.myfico.com/t5/Bankruptcy/HOW-TO-From-BK7-discharge-to-700-in-24-months-or-less/td-...

Googled and found this...GIYF!

[Anonymous]

Well, thought I would post back about how my pre-qualifying application went with the USDA Direct Loan.

I was told my credit was too thin....I need to establish at least two more lines of credit and pay on them, in addition to the Capital One card, for another year. And I was told my income on SS Disability was too low for the county I live in. I get $1220 per month.

So for an agency that says they help low-income people get housing, I am apparently even too low income for them. Amazing!

I was also told that if I had gotten the loan it would have only been 44K max. Enough for a small cabin on some land and that would have been fine, but not meant to be.

My credit scores went down too when they did a hard pull to check credit....by 6-8 points.

So very disappointing.

[Lasardo]

Gained 30 points from a credit builder account

[Anonymous]

Hi Lasardo,

Thanks for that reply.

I don't think I am going to bother with a credit builder loan anymore. I've discovered that it is not my score that affected the USDA loan but the fact I really have no established credit to speak of. In fact the USDA rep was shocked that I had none but when you've rented and paid cash all your life that is what happens. My car has been paid off for more than a decade and I have nothing else. Most people do not live like that.

She told me to establish two more lines of credit which I have. I got a Cap One unsecured for $300 and a Discover secured for $200. Now I have three credit lines and will pay on them for another year. Also, in 18 months I will turn 55 and will get my pension from my last job before I went on disability and she said I needed that since my disability income is too low.

My score when she pulled it was 682...much higher than my FICOs here. So I am doing exactly what she told me to. Can't do more than that.

I also tried with Quicken Mortgage just to see what they would say and believe it or not they said the exact same thing. That I did not have enough trade lines. They pulled my scores at 682, 675, and 618...also much higher than my FICOs here. So I am really wondering what good paying for scores here does...not much it seems when mortgage reps are pulling higher scores.

Anyway, that is my plan and while I did want to purchase soon it appears that is not to be. So I will keep trucking along and hopefully in 18 months I'll be good to buy.

Regards,

happygal

[Anonymous]

happygal, sounds like you got a good plan in front of you!

[Anonymous]

Very informative thread.  Thank you.