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Thread: Increasing my credit score to buy a house?

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    Default Increasing my credit score to buy a house?

    Hi, I am on a mission to increase my credit score. I would like to buy a house in 1.5-2 years time, and where I live they are around 350k. I currently pull in 60k/year before taxes, and with no debt of any sort, hope to qualify for a 300k mortgage. Facts: 650 FICO, salary, 60k/year, have 1 credit card with no late payments for 10 years, 1 paid off student loan (closed in good standing at 7.5k), and 1 closed credit card with 3 late payments (one 120 day, one 30 days, one 60 days late)—this card was closed 4/5 years ago and was alive for 5 years. Of the one credit card that I do have, it is barely ever used (0 balance, and probably reported as no activity? Or, paid off in full 1 day after using it). It seems that what is pulling down my score (total guess???) is 1) lack of different types of debt/loans (no current loans) 2) late payment history which makes a larger portion of credit history given I’ve only ever had 2 CC’s and one had late payment issues 3) current credit card not used much 4) no mix of different types of loans

    For #3, I’m curious: The current credit card not used much—my statement date closes on the 15th of each month and the due date for payment is the 12th of the next month….so I would need to pay whatever amount between those two dates for it to report an activity? I tend to never use it, or, pay it off right away, like the next day online…which means that it never reports an activity? Or, am I wrong… since my legitimate credit report from FICO shows an “ok” for every month of payment for that card…does that mean activity is reported?

    I was thinking: 1) hire Lexington law ($99/month) for a year to dispute my late payments and get them off my record from my closed card 2) get a personal loan of 1k for $1170 or a personal loan of 2k for $2500 over three years with no early payment penalty so that I can have a “loan” on my report plus a “mix of different type of loans” on my report from BestEgg or Upstart or Sofi (personal loan lending companies) 3) get a credit card (chase slate, chase freedom unlimited, discover it chrome for students, citi double cash, wells fargo cash wise visa)…
    Can this raise my score to 750ish in a year/ a year and a half? I calculated awhile back that the difference on a 30 year mortgage with 20% down between 650 and 750 is 60K! Since the rates would be 4.9% vs 3.9%...
    What you do all think? : D

    yes, I claim all my income : D

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    Default Re: Increasing my credit score to buy a house?

    Wow, long post!
    I hear ya tho, I'm working on the same thing,
    I have a different company, they dispute, write letters & all that.
    Ifeel like I've had pretty good success w them, I have a ways to go tho


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    Default Re: Increasing my credit score to buy a house?

    Get added onto someone's Amex as a secondary user who has a really good score and you'll inherit their score over the months - well - not immediately but it will incrementally improve.

    Get another credit card so you have more revolving credit.

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    Default Re: Increasing my credit score to buy a house?

    I have been using lexington law since OCT 2016. They have removed things that were on my credit from owning a nail salon. They removed one judgement that has been hovering over me for years that I refused to pay. (dont co sign for ppl)
    All medical has been wiped off. I use the 99.00 plan and have had great results.
    I dont have the patience to dispute everything that was on my report. I heard about them from another sex worker and she poke the truth, just sit back and shit falls off.

    My score is up over 200 pts than when i started .. Im finally in the green w banks as far as no questions about xyz.
    I plan on home buying after this year
    good luck!
    Last edited by Erika_Xstacy; 12-30-2016 at 11:47 PM.

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    Default Re: Increasing my credit score to buy a house?

    Side note I recently saw someone with a 750 score easily quality for a 450k loan for a home, despite having about 12 school loans, so I would say if you can get your income and score up a little you'll be good to go.

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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by persianprincess View Post
    Side note I recently saw someone with a 750 score easily quality for a 450k loan for a home, despite having about 12 school loans, so I would say if you can get your income and score up a little you'll be good to go.
    this doesn't mean anything without knowing their income or debt size in dollars.

    20% down on 300k is her average annual income. 300k is 5x her annual income (3x is best, 4x should be the max). I know I'm a debbie downer but she might get approved for something she can't afford and it's exactly this kind of situation that led to the 2008 crash. My credit is around 770, I have 6 months worth of expenses saved and I don't see myself buying max a 240k house for around 5 years.
    Last edited by lynn2009; 12-30-2016 at 11:11 PM.
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    Default Re: Increasing my credit score to buy a house?

    Scores are about 'managing' debt... They don't reward you for being responsible and not getting INTO debt, unfortunately

    -You're right in that you have to USE that card... if you're paying it off the next day and not letting the statement post with a balance, it won't be reported as being used. Let the balance ride until the statement posts and then pay it off (you still won't pay interest). FICO is reporting "ok" as in that you didn't miss a payment... If you have a card with a $0 balance that you never touch, it will also be reported as "ok".
    - If you open another account, that's a double-edged sword. It will increase your available credit which always helps, but it will also pull your average account age down. If you go that route, I would go with the Citi Double Cash; the rewards are great. Just autopay some of your bills on it.
    - Mix of loans, I think they like to see auto loans (correct me if I'm wrong, someone). Cars and mortgages are 'secured debt' vs. personal loans & CCs that are 'unsecured debt'. Obviously you don't wanna buy a car you don't need, but if you were in the market for it, getting a very low interest loan on one instead of paying cash would help your score.

    I'm totally interested in this Lexington Law place though. Got a 'nuisance collection' I could use removed... Anyone else have input on them?
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    Default Re: Increasing my credit score to buy a house?

    LL also sent a letter requesting all my current open credit cards along w my car payment, if anything showed paid as late that it is now fixed to show nothing but the payment, which is nice
    The most I was late on payment was 3 months, once and the others showed 30 or 60 late so Im not sure if there is time limit for late pay.
    I called LL and they went over all payments. We spoke for a hour after he gave me options, he pulled my credit and went over things with me.

    https://www.youtube.com/watch?v=oTMT67Wxjfo Skip to the 7 min mark and she discusses her experience with them.

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    Default Re: Increasing my credit score to buy a house?

    I am going to have to re-read this tomorrow because I am super tired. If you really want mortgage advice PM me. I think you may not have enough trade lines. Late payments only affect you if they are recent.

    Also, it is not good to close accounts in good standing just because you are not using them. Obviously the student loan you paid off but from my skim it appears you closed a good CC too. Persianprincess gives a great idea of getting added as an AU on an Amex. That would help tremendously. Your score is not an issue, your lack of credit history may be.
    Last edited by Gia2608; 01-01-2017 at 03:10 PM.
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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by Erika_Xstacy View Post
    LL also sent a letter requesting all my current open credit cards along w my car payment, if anything showed paid as late that it is now fixed to show nothing but the payment, which is nice
    The most I was late on payment was 3 months, once and the others showed 30 or 60 late so Im not sure if there is time limit for late pay.
    I called LL and they went over all payments. We spoke for a hour after he gave me options, he pulled my credit and went over things with me.

    https://www.youtube.com/watch?v=oTMT67Wxjfo Skip to the 7 min mark and she discusses her experience with them.
    Erika, i heard from somebody (friend of a friend of a friend lol) that it is dangerous to use lexington law to dispute a late payment on an account (my old Credit card) that was closed, becuase they might just take the whole history of the card away... which might be worse than having the history of the the card and it's late payments (had the card for five years, last year and a half it was late payment going from 30 days late to 120 late to Failure to pay then I paid if off and closed it, before that I only used the card half the months) but, if I wait 7 years, then the history of the card (age in years) will sow up which is beneficial, but the late payments will drop off. However, that would be in 2019 and I might want to buy a house before then (mid to late 201.

    Erika, did they take the whole account away or just the late payments? Is the account stillopen>?

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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by missenvy View Post
    Erika, i heard from somebody (friend of a friend of a friend lol) that it is dangerous to use lexington law to dispute a late payment on an account (my old Credit card) that was closed, becuase they might just take the whole history of the card away... which might be worse than having the history of the the card and it's late payments (had the card for five years, last year and a half it was late payment going from 30 days late to 120 late to Failure to pay then I paid if off and closed it, before that I only used the card half the months) but, if I wait 7 years, then the history of the card (age in years) will sow up which is beneficial, but the late payments will drop off. However, that would be in 2019 and I might want to buy a house before then (mid to late 201.

    Erika, did they take the whole account away or just the late payments? Is the account stillopen>?
    All my accounts are still open and I see what you are talking about.
    Honda was my major 30 or 60 day late mark and nothing was taken away. I still have my cars with them, making payments.
    BUT I had one credit card I had paid off, late fees, I closed it and now its gone from my history. That is one card. Assuming if its closed, they rid the account bc my other credit cards are still open and showing history.


    I was suffering from debt that was almost 20 years old. Judgments are usually paid off only through court. I was more than elated they removed it. That alone was hindering me from doing squat.

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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by Gia2608 View Post
    I am going to have to re-read this tomorrow because I am super tired. If you really want mortgage advice PM your overall locale so I can factor in taxes and insurance, and run some numbers. I may not be licensed in your area but I am licensed. I think you may not have enough trade lines. Late payments only affect you if they are recent.

    Also, it is not good to close accounts in good standing just because you are not using them. Obviously the student loan you paid off but from my skim it appears you closed a good CC too. Persianprincess gives a great idea of getting added as an AU on an Amex. That would help tremendously. Your score is not an issue, your lack of credit history may be.
    This^^ also OP FICO requirement is inverse to size of down payment. If it is your first home buy, use the FHA first time buyer program - you need a 690 and 3-5% down payment. Much easier to get this. They will have top rates for your area but your price isn't extravagant so should qualify. Sometimes banks will structure the loan so you have a small non-FHA portion and the rest up to the limit is FHA. To go from a 650 to 690 dispute the late line or call them politely and ask them to change it. Authorized user accounts hold less weight with Fair Isaac than they did a few years ago. Go to an FHA approved lender and ask them to help,you get started. Also, why not try for a 240k house first? Just a suggestion.
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    Default Re: Increasing my credit score to buy a house?

    https://www.stripperweb.com/forum/sh...-Than-6-Months

    this old but prob helpful with repairing credit

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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by Bahuba View Post
    If it is your first home buy, use the FHA first time buyer program - you need a 690 and 3-5% down payment.
    https://www.fha.com/fha_credit_requirements

    It's a 580 minimum :o
    So she's good in definitely being able to get a mortgage.
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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by persianprincess View Post
    Get added onto someone's Amex as a secondary user who has a really good score and you'll inherit their score over the months - well - not immediately but it will incrementally improve.

    Get another credit card so you have more revolving credit.
    I did not know this!



    I don't know what happened in April, but right now the app says I don't have a mortgage or car loan to my name so it is not perfect for that?

    BTW thank you, thank you for reminding me I almost missed out on this

    https://www.americanexpress.com/us/c...redit/platinum

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    Default Re: Increasing my credit score to buy a house?

    Yeah but you are not allowed to have any current debts, and they check. Plus you still have to find a lender. Anyway, the message is if she is a first time buyer she should check this out.

    Happy New Year's Eve! I'm headed out for a party at the National Arts Club. Big band, filet, and champagne!

    Quote Originally Posted by Selina M View Post
    https://www.fha.com/fha_credit_requirements

    It's a 580 minimum :o
    So she's good in definitely being able to get a mortgage.
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    Default Re: Increasing my credit score to buy a house?

    I didn't really want to edit my other post because there's a few things in newer posts I want to comment on as well.

    1. With the card that has the late payments, depending on where you live you might be past the statute of limitations for them to collect on the debt. It will remain on your credit report for another 2-3 years but if it past the SOL, you would be in a better position to get it cleaned up.

    http://www.creditcards.com/credit-ca...tions-1282.php

    2. You do not need to hire Lexington law. You have ONE thing to get off your credit report; just do it yourself. Write a dispute letter and mail it to them certified. Save the slip from the certified mail. If they do not respond in 30 days mail a letter to all three credit bureaus demanding they remove it immediately and not place a "dispute" next to the item. Enclose a copy of the certified slip. Be firm and threaten to report them to the CFPB and your State's Attorney General if they do not remove it immediately and permanently.

    If they do respond try to get them to remove the lates with a goodwill letter. See if you can get a fax number for them and send faxes to them over and over and over until they give up.

    3. You definitely need at least 3 trade lines for either FHA or conventional mortgage- it doesn't particularly matter the type of tradeline but I do not recommend a personal loan. The monthly payment will be calculated into your debt to income ratio and will decrease the amount you can be approved for a mortgage on. You are better off getting 2 store cards and paying them in full so the balance is zero. Victoria's Secret and Walmart are both really good in that they will 100% approve you with that score and also they will increase your balance with responsible use of the card. For ex. my Walmart card had an initial credit limit of about $500 and it was increased to about $1,900 in a matter of 4-5 months.

    4. FHA is a good option for most time home buyers and I would recommend you go this route and leave the rest of the money you were planning to use for down payment in a savings account in case you need a new roof, water heater, plumbing repairs; etc. All the crap that comes along with owning a home. They DO go down to 580 but ideally you will want a 620 or better to increase your chances of approval.

    Just as an FYI for other people reading this, you can also apply for an FHA bond loan if your score is 640 where HUD puts up the 3.5% in the form of a silent second mortgage (forgiven after 5-10 years or built into monthly payment; depending on the program and how your loan is structured. If you do this and are able to get the seller to assist you with closing costs you can sometimes buy a home with less out-of-pocket than you can rent an apartment.

    Conventional loans do not need 20% down, you can do 3% down as a first time buyer but also 5 or 10%. The only difference is you will have to pay mortgage insurance until you have a 20% equity stake in the home. The criteria to qualify is a bit tougher than FHA but OP you may want to talk to your loan officer about this as well.

    I do not think it is realistic to expect an interest rate on a purchase loan for less than 4%, unless your credit score is over 800. I know many places advertise rates in the 2's and 3's but rates have gone up since election/ Fed announcement but usually these advertised rates are "teaser" rates used to get you in the door. If you are able to get a lender to give you a mortgage at less than 4% you should 100% go for it.
    Last edited by Gia2608; 01-01-2017 at 03:31 PM. Reason: Typos. So many typos.
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    Default Re: Increasing my credit score to buy a house?

    Random other tidbits... if you get added as an AU, make sure it's reporting. My fiancé is an AU on 3 of my cards but one did not report to the credit bureau for some reason, and another one took several months to appear. You want it showing for as long as possible.

    If you're renting right now, see if the landlord can do RentPlus, they report your rent payment to the credit bureaus. I suggest that just because you don't have a lot of accounts, so the more the merrier right now.

    @Gia, do you not recommend disputing directly with the credit bureau? I submitted a couple online disputes to TU and Equifax ~1 week ago... I figured that was the more efficient way to do it.
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    Default Re: Increasing my credit score to buy a house?

    If you dispute with the bureaus directly they will mark it as a dispute, then reach out to the creditor try to get them to verify the information. It is usually done electronically these days. I recommend also mailing disputes to the creditor as well. I'm just speaking of my experience but I repaired my ex's credit for him and he got like 100 points pretty quickly.
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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by missenvy View Post
    Erika, i heard from somebody (friend of a friend of a friend lol) that it is dangerous to use lexington law to dispute a late payment on an account (my old Credit card) that was closed, becuase they might just take the whole history of the card away... which might be worse than having the history of the the card and it's late payments (had the card for five years, last year and a half it was late payment going from 30 days late to 120 late to Failure to pay then I paid if off and closed it, before that I only used the card half the months) but, if I wait 7 years, then the history of the card (age in years) will sow up which is beneficial, but the late payments will drop off. However, that would be in 2019 and I might want to buy a house before then (mid to late 201.

    Erika, did they take the whole account away or just the late payments? Is the account stillopen>?

    LL is great for short term. I used them when I needed to boost my credit score for a purchase. Almost half of what they removed got re added. What happens is these credit repair services send out so many letters requesting that the debt be proved or removed that 9/10 it gets removed cause they don't respond fast enough (they get bogged down) but eventually when they do get to and are able to prove you owe the debt it gets re added. A few people I know use LL a few months before a purchase like cars or property etc

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    Default Re: Increasing my credit score to buy a house?

    Quote Originally Posted by Selina M View Post
    Scores are about 'managing' debt... They don't reward you for being responsible and not getting INTO debt, unfortunately

    -You're right in that you have to USE that card... if you're paying it off the next day and not letting the statement post with a balance, it won't be reported as being used. Let the balance ride until the statement posts and then pay it off (you still won't pay interest). FICO is reporting "ok" as in that you didn't miss a payment... If you have a card with a $0 balance that you never touch, it will also be reported as "ok".
    - If you open another account, that's a double-edged sword. It will increase your available credit which always helps, but it will also pull your average account age down. If you go that route, I would go with the Citi Double Cash; the rewards are great. Just autopay some of your bills on it.
    - Mix of loans, I think they like to see auto loans (correct me if I'm wrong, someone). Cars and mortgages are 'secured debt' vs. personal loans & CCs that are 'unsecured debt'. Obviously you don't wanna buy a car you don't need, but if you were in the market for it, getting a very low interest loan on one instead of paying cash would help your score.

    I'm totally interested in this Lexington Law place though. Got a 'nuisance collection' I could use removed... Anyone else have input on them?
    Quote Originally Posted by Erika_Xstacy View Post
    LL also sent a letter requesting all my current open credit cards along w my car payment, if anything showed paid as late that it is now fixed to show nothing but the payment, which is nice
    The most I was late on payment was 3 months, once and the others showed 30 or 60 late so Im not sure if there is time limit for late pay.
    I called LL and they went over all payments. We spoke for a hour after he gave me options, he pulled my credit and went over things with me.

    Skip to the 7 min mark and she discusses her experience with them.
    Quote Originally Posted by missenvy View Post
    Hi, I am on a mission to increase my credit score. I would like to buy a house in 1.5-2 years time, and where I live they are around 350k. I currently pull in 60k/year before taxes, and with no debt of any sort, hope to qualify for a 300k mortgage. Facts: 650 FICO, salary, 60k/year, have 1 credit card with no late payments for 10 years, 1 paid off student loan (closed in good standing at 7.5k), and 1 closed credit card with 3 late payments (one 120 day, one 30 days, one 60 days late)—this card was closed 4/5 years ago and was alive for 5 years. Of the one credit card that I do have, it is barely ever used (0 balance, and probably reported as no activity? Or, paid off in full 1 day after using it). It seems that what is pulling down my score (total guess???) is 1) lack of different types of debt/loans (no current loans) 2) late payment history which makes a larger portion of credit history given I’ve only ever had 2 CC’s and one had late payment issues 3) current credit card not used much 4) no mix of different types of loans

    For #3, I’m curious: The current credit card not used much—my statement date closes on the 15th of each month and the due date for payment is the 12th of the next month….so I would need to pay whatever amount between those two dates for it to report an activity? I tend to never use it, or, pay it off right away, like the next day online…which means that it never reports an activity? Or, am I wrong… since my legitimate credit report from FICO shows an “ok” for every month of payment for that card…does that mean activity is reported?

    I was thinking: 1) hire Lexington law ($99/month) for a year to dispute my late payments and get them off my record from my closed card 2) get a personal loan of 1k for $1170 or a personal loan of 2k for $2500 over three years with no early payment penalty so that I can have a “loan” on my report plus a “mix of different type of loans” on my report from BestEgg or Upstart or Sofi (personal loan lending companies) 3) get a credit card (chase slate, chase freedom unlimited, discover it chrome for students, citi double cash, wells fargo cash wise visa)…
    Can this raise my score to 750ish in a year/ a year and a half? I calculated awhile back that the difference on a 30 year mortgage with 20% down between 650 and 750 is 60K! Since the rates would be 4.9% vs 3.9%...
    What you do all think? : D

    yes, I claim all my income : D
    Quote Originally Posted by christylive View Post
    LL is great for short term. I used them when I needed to boost my credit score for a purchase. Almost half of what they removed got re added. What happens is these credit repair services send out so many letters requesting that the debt be proved or removed that 9/10 it gets removed cause they don't respond fast enough (they get bogged down) but eventually when they do get to and are able to prove you owe the debt it gets re added. A few people I know use LL a few months before a purchase like cars or property etc
    Ladies, I literally got excited when I read "lexington law". They are THE shit. They managed to remove an eviction off my credit from years ago. The eviction was paid off but still. They're expensive but they're an awesome company. I recommend them to my family and friends.

  35. #22
    God/dess Gia2608's Avatar
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    Default Re: Increasing my credit score to buy a house?

    I am not saying Lexington Law is not good, just that she really only has one thing to remove she may be better to do it herself and not waste the 600-800 she will probably have to pay them from the start to the finish. I tried them once and didn't like it at all but I have a friend who used them and got a foreclosure off his wife's report so I would say they are probably good for most people.

    With regard to the "mixed accounts" Selina, you are right about that. However, in the OP's particular case it is not the best idea because it will decrease her purchasing power. Just to give you an example- someone whose monthly income is 4,200 (not too, too far off from OP) with little debt can increase their purchasing power by $40,000 by eliminating a monthly debt liability of 240.00. 40,000 can be a big difference in a lot of places.
    XoXo Gia
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  37. #23
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    Default Re: Increasing my credit score to buy a house?

    Your credit score actually goes down each time you apply for new credit. The banks will think that you cannot manage money. Try staying out of debt - all debt as much as possible.

    The only thing that will improve your credit score now is your income.

  38. #24
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    Default Re: Increasing my credit score to buy a house?

    Well you don't want to bang your credit score with multiple inquiries ... but you do need a car loan, revolving credit, etc in order to prove you can manage having credit extended to you ... so you essentially have to selectively apply.

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