We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

We plan on putting 40,000 down in a house priced at 165000. We also have an extra 20000 cash. We currently have 3,400 in credit card debt on a 4000 limit. Is it better to pay the debt down, or keep the money in the bank with respects to improving our credit score.

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

This is what you need to understand about your credit score:

1. Payment history- 35%

2. Total debt owed to avialable credit ratio-30%

3. Length of time establishing credit-15%

4. Types of credit established-10%

5. Inquiries and New accounts-10%

As you can see, 30% of your score depends on how much balance you carry vs. your available credit. If you%26#039;re carrying 3400, and your limit is 4000, then you%26#039;re using 85% of your available credit, which is WAY too much. You should use no more than 25% of your available credit at any given time.

My suggestion would be to pay off the credit card, and either wait until it reports, or you can do what%26#039;s called a rapid rescore which will show the results when you pay off the credit cards. You didn%26#039;t go into details on what other accounts you have, so I%26#039;ll assume that the credit card is the only account you have.

With you putting up $40K, that%26#039;s more than 20% that%26#039;s suggested when purchasing a house. As for the additional money, I would strongly suggest setting it aside to cover additional expenses that will come along when you close on the house.

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

how can you have that much money and not have good credit?

you need to pay that card off..get another one, buy a car and pay all those off

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

Scores never improve quickly. The only way you could have a fast response is to challenge the validity of your bills. IF you succeed in getting your bills removed from your score, your numbers will go up. Otherwise, you just have to wait for time to remove bad marks off your score.

Assuming you have late payments in your history.

:)

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

you should definitely pay off the credit card in full - that will help more than anything - keep the account open, just don%26#039;t use the card - as for helping quickly - your record only gets updated as frequently as your creditors report to the credit bureau, so I doubt it will go up much in the near future - with the kind of downpayment you have, you shouldn%26#039;t have trouble getting the mortgage, the rate will just be higher

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

Take $3400 of that 40k and zero out that card immediately. Your debt ratio accounts fo 30% of your fico so this will make a difference almost immediately with a rapid rescore. (Ask a broker)

Put the $20,000 in a 6 month CD, you should be able to get over 5%. (To show reserves for qualification)

Put $33,000 down on the $165,000 home and you will be at 80%, your DTI will be fine, assuming you have a verifiable income, and you will be able to get a great conventional loan, even with your low credit score.

If you need a quote, see this link below.

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

here i%26#039;ll share to you an article that could probably help.

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http://www.newhorizon.org/Info/what-is-a...

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

Do what Steven L said because after you pay those cards off in full your score will take 12-24 months to start going up.

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

You need to pull your credit report and figure out what caused your score to drop so much.I highly doubt that a liability of 3,400 would cause your score to be so low. Paying it off would only increase it by a few points. Have you made your payments on time in the past?

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

10 months ago my husband had a credit score of 410 after we closed our business. Today it is 770. He has had 36 derogatories taken off from his credit report. Check out this credit repair company.. https://parker.fixcreditbiz.com .. You should start seeing results in the first 3 months. You can email directly at parkerfixcreditbiz@yahoo.com or I can give you a phone number. Good luck.

We are trying to buy a home w/ credit score of 557..... Best way to improve credit quick?

Pay off the credit cards. That%26#039;s the fastest way to improve your score.

You should also take a look at your credit report and see what is causing such a poor score. If you have negatives, the mortgage company is going to require you clear those up before you can get approved. You may want to start dealing with those now. Start with the newest and work backward.

Considering the current flux in the housing market and your poor score, you may want to wait before buying. That would give you time to clean up your credit and qualify for a better interest rate.