Posted on: 19th Aug, 2008 06:07 pm
had foreclosure 3 yrs ago due to second note. recently applied for a home loan they said we need more credit lines to off set bad items on report. How do you get more credit if your credit is not so great to begin with ? any helpful ideas? tired of paying rent of 950.00 a month.
Hi nashtracie,
How low is your score? I understand it's not easy getting more tradelines with a low score. Moreover, it's not a good advice too. I mean if you're not comfortable paying the existing debt, how can you go for more tradelines and manage them? Yes you can use a cosigner's credit and income when it comes to qualifying for a loan. But what you need to think here is whether you manage a mortgage?
I understand you don't want to pay rent anymore but what's important is to check your mortgage affordability. You may use the affordability calculator at http://www.mortgagefit.com/calculators/howmuch-afford.html . I've also shared my thoughts at your previous post on home purchase .
Thanks
How low is your score? I understand it's not easy getting more tradelines with a low score. Moreover, it's not a good advice too. I mean if you're not comfortable paying the existing debt, how can you go for more tradelines and manage them? Yes you can use a cosigner's credit and income when it comes to qualifying for a loan. But what you need to think here is whether you manage a mortgage?
I understand you don't want to pay rent anymore but what's important is to check your mortgage affordability. You may use the affordability calculator at http://www.mortgagefit.com/calculators/howmuch-afford.html . I've also shared my thoughts at your previous post on home purchase .
Thanks
I too emphathize with the dilemma of how to get new good credit once you have a low credit score. James is completely correct that you should be very wary of any new debt...but since credit scores are so important these days to obtain insurance, employment, and of course to buy a car or a house or even rent an apartment. You do have to try to get your score up by somehow getting some new credit that you can show you can manage. You may want to pursue getting a secured credit card with your bank or with a bank that offers a secured card (you give them a deposit of , say, $500 and then you have a credit limit of $500. It is called a secured card because your debt is secured with your own funds.) I know Capital One offers a secured card, so does Orchard Bank. I am NOT necessarily recommending these creditors, just mentioning that I know they do offer this type of card. Your own local bank may also.
You would be using a secured card as a tool to building your credit - by occasionally making a very small purchase then immediately paying it off... keeping your balance at zero, and make every payment on time. These secured cards report to the credit bureau just like regular cards. IT IS imperative that you rarely use this secured card and keep balance at zero, always remember you are using it as credit-building tool. It goes without saying that you should have no lates on this card.
Also, you can be added to someone else's card (such as a parent) to help your score. But this would only work if card has low balance and perfect payment history. (I heard this was changing but to my knowledge, this still works.) these are only 2 suggestions I know of. good luck!
You would be using a secured card as a tool to building your credit - by occasionally making a very small purchase then immediately paying it off... keeping your balance at zero, and make every payment on time. These secured cards report to the credit bureau just like regular cards. IT IS imperative that you rarely use this secured card and keep balance at zero, always remember you are using it as credit-building tool. It goes without saying that you should have no lates on this card.
Also, you can be added to someone else's card (such as a parent) to help your score. But this would only work if card has low balance and perfect payment history. (I heard this was changing but to my knowledge, this still works.) these are only 2 suggestions I know of. good luck!