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how to raise credit score

hubby n i want to buy a house...but have low to no credit score, we pay bills on time all that easy cheesy stuff but still not sure really what else.

is it credit cards (what limit and how many) we'll behave maybe just pay for our gas then just pay it all or most of it each month.

loans?? (dont want a car loan though) we have a loan with crazy interest we want to get rid of by paying it off its $3000 but we have some money in the bank would it be better to get a loan thats $1000 loan or more? or pay $2000 on current loan and get another $1000 loan.?? sooo lost help help

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Elizzaay

Asked by Elizzaay at 12:01 AM on Mar. 11, 2010 in Money & Work

Level 3 (23 Credits)
Answers (4)
  • Your credit is built over time, but certainly getting a "loan" of some type and demosntration that you can pay it back will be helpful. You should open up 1-2 credit card accounts, and use but pay off each month. This demonstrates that you can "borrow" the money but pay it back promptly. Don't buy into the rumor that carrying a balance will build up your credit better and faster-- it's not worth the cost of paying interest.

    Getting a car loan is probably your easiest way to build credit as it is a traditional loan with security. You're going to get high interest rates only until you build your credit. Personal loans are not as helpful as they are not guaranteed by anything-- so no security, and the interest on them is generally higher due to lack of security.

    You say you have a loan for $3K, but if not a car loan, what kind? The more promptly you pay back loans, the better.
    Busimommi

    Answer by Busimommi at 12:08 AM on Mar. 11, 2010

  • its just a personal loan
    Elizzaay

    Answer by Elizzaay at 12:43 AM on Mar. 11, 2010

  • Have you talked to anyone at a bank or mortgage company? If you can prove that you're reliable in paying bills on time (at least 2 years) and have been employed at the same job for the same amount of time, if you have 20% down payment, if you have a low debt to income ratio, you can go with a manual underwriter. That's what I did when I bought my first home, no problems at all.

    Credit cards and loans would slowly build credit, and if you have a low to zero credit score they're hard to get anyway.
    michiganmom116

    Answer by michiganmom116 at 8:48 AM on Mar. 11, 2010

  • I built my credit by getting small loans from my bank and a secured credit card. See if your bank will loan you a small amount like $1000, put it in a cd and use it to pay off the loan. I did this several times with different amounts of $. I spent about a year building my credit. This was several years ago. I know have a very high credit score.
    Anonymous

    Answer by Anonymous at 1:22 AM on Mar. 12, 2010

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