If on Jan 1 2015 my experian score is a 601 what the best I could do by Jan 1 2016

[Anonymous]

Use the cards. Just throw something you were already gonna buy on em. Netflix or laundry detergent. Whatever. Just enough so they see you pay your bills and report as such to the bureaus. And if it were me i would get both of them at once rather than spacing them out. I have 5 secured cards that i got all in a row, mainly because i didnt do my research well ahead of time. I wrote a short review of each a while back, if you want to read pluses and minuses of my five look at my past posts. 

http://ficoforums.myfico.com/t5/Credit-Cards/Secured-cards-my-experience/m-p/3696888

[Anonymous]

Oh and as for what you need, wells fargo announced they were going back to 580 mid scores potentially (yikes) most lenders look at 640 mid as the bottom. Some have some overlays at 640 some may not go below 660, some may be willing to work at 620. Before i found out about the USDA direct mortgage, I called some lenders and point blank asked. They will tell you their guidelines for the most part. Or go to broker that reps several lenders and ask what you could get at various scores. Maybe you can get the score to 660 in a year, but 680 would get you a better deal so you wait an extra couple months. Dont be afraid to ask them, they want your business and your money, let em earn it!

[Anonymous]

This seems pretty reasonable actually. I had my exp score up to a 658 but it dropped 57 points because ERC reported an old sprint after not reporting for over a year. Currently I'm am DVing my only two collection accounts and making sure nothing else gets to 30 days. It looks to me if both those accounts come back valid they are only $562 and $331 respectively. These should be PFD candidates. And if I use my tax returns to remove these negative accounts as well as open up 2-3 secured credit cards then all I have to do is make all my payments and my late payment history should become less of a factor over the years. Does this sound like I have a reasonable plan? Am I over simplifying the process?

[Anonymous]

Actually here is another question. I think if I try and buy a tractor it's the same as an auto loan. Would that be as helpful as a secured credit card?

[Anonymous]

Use them for things you would normally buy with cash or debit card - groceries, gas, utility bills, etc, and then just go online and pay the balance down as soon as it posts. Note what day the statement closes (with cap one its a few days after the due date) and make sure its paid all but a few dollars, then pay it in full a few days after the statement closes. The balance reported to the CRA's will be whatever is there the day the statement closes. This is the balance that FICO will score you on. You want to keep this reported balance below 10% of the cards limit, but not zero. You can vary the amount each month to find out your 'ideal' balance that gives you the most FICO points.

[Anonymous]

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@Anonymous wrote:
Actually here is another question. I think if I try and buy a tractor it's the same as an auto loan. Would that be as helpful as a secured credit card?

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No, it would be another installment loan. These are helpful, but not nearly as much as Credit Cards, and you really only need to have one. If you already have one, a second one does not help very much - in fact it may hurt your DTI (Debt to Income ratio)

[Anonymous]

Is the debt to income ratio based off your credit card limits or balances?

[cartwrna]

Both. To figure it add up your balances, then your limits separately. The formulae is balance divided by limits times 100. That's your ratio.

[Anonymous]

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@cartwrna wrote:
Both. To figure it add up your balances, then your limits separately. The formulae is balance divided by limits times 100. That's your ratio.

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Thats UTI%. Debt to Income is not a part of your FICO score, but is often considered when apping for new credit - particularly with mortgage apps.

[cartwrna]

Good catch Norman! I must have had credit cards on my mind :-P !