Posted on: 21st Oct, 2010 05:15 pm
Hi all.
Currently I have a credit score of 600. In order to qualify for a home loan I need a minimum score of 620. Aside from my vehicle loan (of which my husband cosigned on) I only have one open line of credit in my name -- with a remaining balance of around $500.
My question is what would be the best/fastest way to bump my credit score that remaining 20 points, so that I can qualify for a loan? Would paying off the remaining $500 balance on my credit card get me there?
Any help would be much appreciated.
Currently I have a credit score of 600. In order to qualify for a home loan I need a minimum score of 620. Aside from my vehicle loan (of which my husband cosigned on) I only have one open line of credit in my name -- with a remaining balance of around $500.
My question is what would be the best/fastest way to bump my credit score that remaining 20 points, so that I can qualify for a loan? Would paying off the remaining $500 balance on my credit card get me there?
Any help would be much appreciated.
Welcome Guest,
You can pay off the remaining balance on your credit card which will help you in improving your credit score. However, you can apply for a FHA loan with a credit score of 600 and there are chances that you may qualify for the loan.
You can pay off the remaining balance on your credit card which will help you in improving your credit score. However, you can apply for a FHA loan with a credit score of 600 and there are chances that you may qualify for the loan.
Thanks!
From what I've read, trying to qualify for a FHA loan with a credit score below 620 (even though I'm really close, and even though my husband makes good money as well) is pretty difficult -- and even if I do qualify, my interest rate will be quite a bit higher then it would if I had a 620 score... Is that true?
Also, if paying off the balance on my current credit card didn't get me there, would opening up a new line of credit and immediately paying off any accrued balances on it, get me there in a fairly quick amount of time? It just doesn't seem like a 20 point boost would be that hard to achieve lol.
From what I've read, trying to qualify for a FHA loan with a credit score below 620 (even though I'm really close, and even though my husband makes good money as well) is pretty difficult -- and even if I do qualify, my interest rate will be quite a bit higher then it would if I had a 620 score... Is that true?
Also, if paying off the balance on my current credit card didn't get me there, would opening up a new line of credit and immediately paying off any accrued balances on it, get me there in a fairly quick amount of time? It just doesn't seem like a 20 point boost would be that hard to achieve lol.
Definitely do NOT get a new credit account. The hit you'd take on credit simply because of the inquiry, the newness of the account (lack of history), etc. would hurt far more than help.
Paying down the $500 to nil or close to it is an excellent idea. You don't have to take it down to zero, especially if that $500 might be put to better use elsewhere. Reducing the balance to not more than 30% of whatever your credit limit is would be a good idea. If you have a limit of $1000, for example, keep your balance no higher than $300.
Bumping the score immediately simply doesn't happen. It's still going to take a month or two for that to take place. In the interim period, don't go looking for any new credit (loans, credit cards, etc.).
Paying down the $500 to nil or close to it is an excellent idea. You don't have to take it down to zero, especially if that $500 might be put to better use elsewhere. Reducing the balance to not more than 30% of whatever your credit limit is would be a good idea. If you have a limit of $1000, for example, keep your balance no higher than $300.
Bumping the score immediately simply doesn't happen. It's still going to take a month or two for that to take place. In the interim period, don't go looking for any new credit (loans, credit cards, etc.).
