@Anonymous wrote:
Hey thanks so much for the reply. I do not have any credit cards, I never have. I was told I need to get my credit over 640 to qualify for a particular program for a little to no down payment under the FHA program. I have two things wrong that I have been told of. A cable inquiry from a while ago, in which my brother used my name like a jerk, and a defaulted perkins loan, which I am working with the school to resolve and go back to original payments.
Honestly I have always been afraid of credit and their cards of plastic fury. But I want my own home and I want to be able to save money for things. As for anything else I have some low hospital bills that are like ten years old, but was told to leave them alone. I pay my car payment on time each month, and my main school loan. I was told I need some "revolving credit" to increase my score, that is why that card was suggested. Also he told me they report every 14 days so it would bring me up fast.
If I take your route, how long would it take to aquire 20 points? Should a secured credit card be used or is this more for people trying to recover? You say a 5 dollar balance, does this mean pay it off when or slightly before the due date then buy something else to keep it at $5? And lastly, would it be a bad idea to use the card, instead of the $5, for gas and pay it off the same as previously suggested?
If you have no credit cards now, you should see about a 40 to 60 point gain by adding three cards.
You can actually use the cards all you want. The point is to only have a very small balance report on the statement cut date on only one of the cards. For some folks it's just easier to put on Netflix charge on their card and call it good. Sometimes you won't know the statement cut date in advance of the first statement, but you can push a payment through your bank's bill pay system to that creditor. Say you owe $25 on your account from one charge. Immediately after making that charge, "push" a payment from your own bank account to that credit card for $20.
Utilization just looks at any point in time, so if you have multiple cards report, or a slightly higher balance, it doesn't matter because it will clear up again next month if you get it right.
I don't believe First Premier reports twice a month. All credit cards report once a month, and sometimes they do what is called a mid cycle update, which is usually because you have put a great big charge on your account and they want to caution other lenders that you might be desperate. I believe your loan officer is wrong about every two week reporting.
Your loan officer is giving you basically good advice about getting some revolving cards. You just don't need First Premier.
Go the prequalifier now for Capital One and report back to us if it says you are approved for a card. It will report after the first statement cuts in about 30 days or less.
If you are not getting a mortgage till March, that's fine.
If you had some existing revolving credit, I would recommend Barclay's because they report new accounts the next day. But without any revolving cards, they are not likely to approve you.
Also, if you can get a Wal-Mart or Lowes card through Synchrony Bank, they tend to report new cards within a couple of days.
The every two week reporting is actually not something you want. You want the new account to report so you get credit for having it. That's all. Once the account is open, every two week reporting makes managing that reported balance twice as hard.
