Thin Credit File...Desperately in need of help.

[Anonymous]

Hi,

I am in my early thirties, i have a baby on the way and I’m desperately in pursuit to fix my credit.  My goal is to get a home mortgage and a small used car loan.  When i stared my quest to clean up my credit i had about 5 outstanding accounts that was holding my FAKO credit score to approx. 580.   One by one i actually was successful to get all but one removed from my credit report. My Experian shot up to 799! My Equifax soared to 750! But TU wasn't able to offer me a FAKO due to a thin File.   I was on a roll; i successfully cleaned up my credit in a matter of 3 months.  This is where i should have stopped but i didn’t, i wanted my credit report clean of all negative pass due accounts.   Well, i was successful in getting the last negative thing taken off my report. This was my ultimate downfall apparently.  I now have a thin file.  I’m not even able to get a FAKO score.  I messed up so big.  I applied for an AMEX unsecured card and was denied.  I eventually applied for a Capital One Secured and was accepted. That card is in the mail right now. 

My question to you is how fast can i get my credit back up to get a home loan?  Would getting a car loan help my situation or should i just a purchase used car out of pocket?   I am so lost. I have no family that i piggy-back on their credit.  What should i do?  I do have two closed account that date back to 2001 that were closed in good standing but that’s it.  
Ask me anything you would like if it would help with your advice.

Sincerely,

Mick

[Shogun]

You are on your way, and you are doing it right.  Plus I'd rather have a thin file than a dirty one, so no problem there.  Let that secured card post and let it age for at least 3 months, then add to it.  You should be ok then.

[lmfields84]

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@Shogun wrote:

You are on your way, and you are doing it right.  Plus I'd rather have a thin file than a dirty one, so no problem there.  Let that secured card post and let it age for at least 3 months, then add to it.  You should be ok then.

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+1

[Anonymous]

I really appreciate your reply!   Thank you very your kind word of encouragement, they mean a lot.   Would you suggest that i try for a car loan?  One of those places that say no credit, bad credit.....you'll be approved.  Or suggest i just wait.   I want to do everything right!   I am moving this week to yet another apartment and i want this to be the last apartment i ever live in as long as i live.  I'd like to say that is was fun while it lasted but “community living" is just not for me.  I will keep this thread updated as to the progression of my credit FAKO scores starting in about 3 months from now hopefully.  

And has anyone ever gotten a FHA loan with thin credit?

Thank you so much!

This Forum ROCKS!

TransUnion: N/A Experian: N/A Equifax: N/A

[kjel]

Let your secured card age 3-6 months. As a previous commenter rightly pointed out, it's better to deal with a thin file rather than a dirty one. One thing that you might not know is that some banks will underwrite a mortgage using non-traditional credit. I had a client that was so freaked out by credit after filing bankruptcy 10 years ago that he paid cash for everything from that point forward. They used his 24 month payment history on utility accounts, car insurance, rental payments as a basis from which to underwrite him. Certainly not as easy as a typical underwrite but it was successful.

[Sock]

Whether or not you go for a car loan has a lot to do with when you plan on getting a mortgage.

Personally, I would not buy a car on credit within 12 months of buying a house. The recent inquiry and sudden jump in DTI is just too much.

You have no idea how many people "lose" their dream home at the closing table because they went out and bought a new washer/dryer that weekend. (It happens ALLLLL the time.)

Keep your credit card, keep the balance low or at ZERO, and just wait it out.

Also, sometimes the size of your down payment can affect your interest rate on the mortgage... Just yet another reason to hold off on the car.

[Anonymous]

Hey Sock, 

 I am going to try and get pre approved in about 10 months from now.  DTI stands for?  Thank you for the advice, i will just buy a car with cash then. 

Thank you,

Mick

[Anonymous]

Well i got my Capital One Platinum secured credit card and i activated it and i have a credit limit of 200 bucks.  Do you suggest i add more money to it to get the credit limit up or does it not matter to get my credit score up.   I used about 12 dollars on it already and plan to keep it under that 7%  and pay off my bill in full about a week before its due. My only objective is to get approved for a home mortgage around 150 K.   Please guide me. Thank you so much.

mick

[Shogun]

I'd add a bit of money to the secured card.  It would still be your money anyway, just kind of like a savings account.  As far as the car loan, I wouldn't buy from one of those if I could help it, and I especially wouldn't buy just to add the TL to my CR.  The rate would be high, and not the account you would want posted.  Instead, I'd go for another secured card.  You still have a little time before the mortgage process, so another revolving account would help.