@Anonymous wrote:I have no idea where to start. I have a score of 625. I would like to qualify for a mortgage at the end of next year- Possibly FHA? (I don't know much about this kinda stuff). I started by pulling my credit reports last year. I have been working towards paying off all the stuff showing as delinquent. I am paid off. I have studnet loans- total left to pay on that is about $4,000. I have that on auto pay so it shows I have paid that on time. Now that I am caught up on my delinquent accounts, I plan on paying extra towards my student loans to pay them off quicker. I recently applied for a credit card and quialified for a $300 limit (wa wa waaa!) and I also got a $300 limit through a retail store. Im just glad I qualified for something because I have never been approved for NADA!!! I thought I was going to have to get a secured card.
I have sat down and looked at my income/bills. Thankfully, I can now afford to save at least $1000 a month so I can have a down payment by the end of next year.
Anyways, so now to work on my credit- What do I do from here?
- If I pay my little credit cards on time for the next year, how much should I expect my score to rise?
- I used the credit simulator and I put "pay everything on time for 1 year" and my credit score did not go up not one point! Then I tried "pay late" and my score dropped about 20 points. So whats the deal? If I pay everything on time for a year I shouldn't expect my score to increase??!!??
Any advice or info would be greatly appreciated. I am a young buck when it comes to this credit stuff.. I am just now interested on improving (late I know).
I would look and see if any of your deliquents were charge offs if they were then you may be in an little trouble. Before you paid them off you should have tried to do PFD, so once you paid them off they would be deleted from your credit report. If you paid them off now they have no real incentive to delete them. Not all places will do PFD so if that happens then you will probably have to wait for the entire 7 years or so for them to fall off. Getting rid of your "baddies" is probably the only way you will get your score up really fast in short period of time.
@mongstradamus wrote:
@Anonymous wrote:I have no idea where to start. I have a score of 625. I would like to qualify for a mortgage at the end of next year- Possibly FHA? (I don't know much about this kinda stuff). I started by pulling my credit reports last year. I have been working towards paying off all the stuff showing as delinquent. I am paid off. I have studnet loans- total left to pay on that is about $4,000. I have that on auto pay so it shows I have paid that on time. Now that I am caught up on my delinquent accounts, I plan on paying extra towards my student loans to pay them off quicker. I recently applied for a credit card and quialified for a $300 limit (wa wa waaa!) and I also got a $300 limit through a retail store. Im just glad I qualified for something because I have never been approved for NADA!!! I thought I was going to have to get a secured card.
I have sat down and looked at my income/bills. Thankfully, I can now afford to save at least $1000 a month so I can have a down payment by the end of next year.
Anyways, so now to work on my credit- What do I do from here?
- If I pay my little credit cards on time for the next year, how much should I expect my score to rise?
- I used the credit simulator and I put "pay everything on time for 1 year" and my credit score did not go up not one point! Then I tried "pay late" and my score dropped about 20 points. So whats the deal? If I pay everything on time for a year I shouldn't expect my score to increase??!!??
Any advice or info would be greatly appreciated. I am a young buck when it comes to this credit stuff.. I am just now interested on improving (late I know).
I would look and see if any of your deliquents were charge offs if they were then you may be in an little trouble. Before you paid them off you should have tried to do PFD, so once you paid them off they would be deleted from your credit report. If you paid them off now they have no real incentive to delete them. Not all places will do PFD so if that happens then you will probably have to wait for the entire 7 years or so for them to fall off. Getting rid of your "baddies" is probably the only way you will get your score up really fast in short period of time.
First off, don't put too much stock in the simulators. They're a "guide" but by NO means set in stone 
The simulator told me that by paying off $655 of my credit card debt that my score would raise 18 points. I paid off $655 of my credit card debt and my score took a 20 point nose dive it is what it is
As stated above, yes, it would've been nice to utilize the PFD approach, however since you're at $0, that's no longer an option. Maybe try sending good will letters? Over, and over, and over again sometimes you get lucky (based on who the creditor is).
If you're looking for a mortgage you only need to hit 640, and I think there are some options for FHA below that as well (I think 620 is the cutoff). If you look at FHA you only need a 3.5% down payment. And depending how soon you're looking to buy, you might actually already qualify and not even know it!!! My scores on here are 661, 660, 661 and my mortgage scores are all just a few points shy of 700!!! So there can sometimes be a large variation in FICO 08 scores vs. mortgage scores (same with FICO 08 vs. auto, etc)
You did the right thing getting two credit cards. Just manage them wisely and keep the balances really low. After you hit 3-6 months request a credt line increase... and see what happens Just make sure to keep your CC utilization at, or below 9% on one card and posting $0 on the other. (this seriously makes a huge difference in scoring)
Baddies are baddies are baddies... I think 99% of us have had them...or we wouldn't be here, obsessing on our credit reports/scores Take heart.. you're young, and I'd rather learn that lesson young!! Good job finding this community!! Lots of great people, great advice, and a ton of support!!