Low credit score but no debt.?
My husband and I have low credit scores due to not good history in the past. We have currently payed off everything on our credit reports therefore have no remaining debt. We have not been late on any car payments in the past 24 months and we have no credit cards. Mostly everything that was on our credit was medicla bills. We have also paid our vehicles off early which one of them is payed off 36 months early. My question is how do i increase our credit scrore. Since we began it has gone up 100 points but that still only leaves us at the 600 range. Is it possible to get a home loan with no debt making 75,000 /yr but not the highest credit score.
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August 18th, 2010 at 4:14 pm
Paying your bills on time (utility bills) is a big contributor towards credit score. Your score will continue to improve over time.
Yes, it’s possible to get a mortgage with a score below 700, but very difficult at the moment. However, in 3-6 months, this should get easier.
Increase your credit score by getting a credit card or two, maybe a VISA and a store card. Use them, and pay them in full each month. You can get a secured credit card if you need to. You’d deposit some money into a savings account with the credit card issuer and you’d have credit in the amount of the deposit. After 6 months to a year, you’d get the money back and would keep the card as a regular credit card. Keep the amount small, such as $500 – $2,000. For a store card, Macy’s, Sears and Target may be the easiest to get. Again, keep payments current to avoid interest and fees.
August 18th, 2010 at 4:14 pm
Here is a secret on achieving that almost perfect score.
Get a credit card and use it for the things you need.
Pay it in full each month – carrying a balance will destroy your credit worthiness.
That’s it!!! Go get a card – but be responsible.
Target’s card is a visa – kind of easy to get.
Make sure you review your credit reports again
annualcreditreport.com = totally free
dispute or delete anything that is over 7 years old.
Keep a credit card open for a long credit history.
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August 18th, 2010 at 4:14 pm
Paying utility bills does NOT "build credit." "Judy" has the right answer.
August 18th, 2010 at 4:14 pm
You score will continue to improve with a longer good payment history and as the derogatory items age off your report. Paying derogatory items does not improve your score as the damage is already done.
You should get a major credit card and use it and pay it off in full every month. This will help build more good credit history.
I just heard on the news that you really need a score in the 700 to get a decent rate mortgage. You score is only a small part of the qualification process. You employment history and debt to income ratio are major factors. You will also need at least a 20% downpayment.