Credit Report - Bradner,OH

If you have longstanding debts or ANYTHING still in collections (even if you are paying it) your report will not really get better, until hat is gone or vastly improved. 3-4 months, is not long. Not long, at all. If you carry large amounts on your credit card and your debt is more then your income, that will cause your score to be low. Making minimum payments, does not lower your debt. There are many things that go into credit ratings. I think it's very naive to think you can improve your credit in months and qualify for a house :( I do think you need to talk with someone, it can often take years. Home loans are much harder to get now.
Contact a financial planner, or a credit counseling place. NOT a place that consolidated debt and arranges payments. Credit counselors only give advice.

Have you talked to a banker or financial advisor? Why don't you do that and get some ideas about what you need to do. The LAST thing you need to do is pay someone to tell you what a mortgage banker or financial advisor can tell you for FREE. You can also speak with a representative from the credit reporting agency as well.

You said you have "never been late" on the credit card BUT, are you just paying the minimum payment? You should never, ever carry a balance on a credit card.

Your credit score can go down with multiple inquiries and applications on your credit as well.

Can you wipe out the auto loan? How fast? What other debt do you have that you can get rid of. You need to get out of debt.

All that said, when you purchase a house, you have to know that not only will you have a mortgage payment, you will have more monthly expenses as well as house upkeep expenses (some of which are unexpected and unavoidable).

I don't know how old you are but be patient, take your time, work on your financial situation. Don't jump into anything with knowing ALL the facts and expenses involved.

Best of luck to you.

First and most importantly the one thing that you need to understand it that it takes years to build up a good credit score, unless something drastic happens you can't expect to see a large improvement in just a few months. It's been years since I've checked my credit score, but last time it did, there was a 50 point difference between the lowest and highest score.

Actually, one of the things that could have decreased your score is your secured credit card, as you just opened it. I recently switched car insurance companies and received a letter stating that I would need to pay a higher rate because I had credit that was less than 24 months old.

There really is no reason for you to be paying for and monitoring your score. (monitoring your report every few months, however, is a good idea) You may want to read this article http://money.msn.com/credit-rating/should-you-monitor-cre... Use that money to pay off your debt. Get a free report every 4 months, your entitled to one per year for each of the 3 major companies at annualcreditreport.com.

Yes, meeting with someone would be helpful, but even more important is that you need to do some research and learn about credit scores. There are some great articles on www.msn.com in the money section.

There are lots of things that go into calculating a FICO score. Some of the top ones....

* Debt ratio - The amount of credit available compared to the amount of credit you've used, this should NEVER be over 30%. So if your limit is $2,000, don't ever charge more than $600 on that card. This is the only time that carrying a debt on your credit card is bad for your credit score. Ultimately, you want the ratio to be less than 10%.

* On time payments - even if you make only the minimum payment on a credit card, make sure it's on time. If you have an installment loan, like a car payment, and it's due on the 1st, but you're not charged late payments until the 5th. It's still late if you pay it on the 2nd.

* Credit inquires - applying for credit, or inquires on your account can decrease your score. If you personally request your report, it doesn't count.

* Long term history - creditors want to see that you're responsible and are capable of handling your credit. Show that you've successfully paid off a car loan over several years. Show that you've had a credit card for 10+ years.

Some misleading information...

* Carrying credit card debt hurts your credit score. This is only true if the ratio between your balance and limit is greater than 10%. Although, financially it's not good to carry a credit card balance.

* Having lots of credit cards hurts your credit score. Actually, people with higher scores usually have at least 3 active credit cards, with either a small or no balance. What hurts your balance is when you have high limits and little income.l

* You should close your old credit cards. Keep your accounts open, even if you're not using them. Remember long term history, builds your credit score.

Another thing you'll want to keep in mind if your ultimate goal is to purchase a house, is that a mortgage company not only looks at your credit score, but also things like your residence, (do you move a lot), your employment history, your assets (in addition to the amount needed for a downpayment and closing costs, you should have a sizable savings account).

If you've been with your bank for a number of years, sit down with a banker in the loan/mortgage dept, they will give you advise for free. Bring your credit report with you, don't have them run the report. You could also contact a mortgage broker.

Credit reports take a lot longer than 3 or 4 months to improve. And cleaning up disputed credits is just the beginning. You have to show history over time of responsible financial behavior. Not being late is a start but if you pay off balances in full, that's even better. And those who told you to close credit cards...only close the department store type cards, leave bank type cards open. It let's them know that you have creditors willing to allow you a line of credit if you need it. Also know that multiple credit inquiries can affect it as well. So don't be looking to open any more cards or buy anything else new unless you absolutely have to. I agree that a mortgage broker would be a huge asset and let you know what your options are in buying a home...as well as help you anticipate any expenses that come with it.

Hi, V.,

There are so many things that go into this. I could type a lot of it out, but I found a website that sums it up for you.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

This will show you the breakdown of where a typical FICO score comes from. As another mom mentioned, I would also call your bank and see if there is someone who can look at things with you (for FREE - or at most the cost of them running your credit report for you...which should be relatively cheap -- as in probably no more than $30).

Hang in there...credit scores don't have drastic improvements overnight. It takes TIME for things to show a true reflection of your credit.

Never carry a credit card balance above 30% of the credit limit...

Good luck!

V.:

Please don't cry. It will get better. I promise. It takes time. I know what it's like to want something so bad that you are feeling like you are pushing a rope!!

You need to sit down with a financial adviser and find out what is going on. They will help you reach your goals. Call your bank and ask if they have a Financial Adviser on staff that will help you. With USAA, my bank, we have access to certified financial advisers. They will review your credit report, income, assets and liabilities and help you get on track and reach your goals. These services should be free.

What kind of derogatory reporting do you have on your credit report?

If the reporting is accurate on your report - the only thing that will change it is time - the drop off date (which you can get off the report as well). If the report is WRONG - dispute it and have it removed.

Credit scores change monthly...if not more often depending upon the number of transactions on your report.

How many times are you applying for credit?
Paying the minimum payment on a credit card instead of paying it off each month or even paying more than the minimum amount. The longer you carry a balance? It can hurt your credit score.

Your auto loan - while it shows ability to repay - the longer you have it on there - like 60 to 72 months - the less it impacts your credit report.

Do you have a budget in hand? If not - get one together. If so - is there a way to pay your credit card off every month? What about paying your auto loan off early?

Good luck!

Achieving a high credit rating is a complicated process. It is about figuring what your safe borrowing debt to income ratio is and then opening a percentage of that borrowing level for short term and long term credit. Having the car loan and never being late is a great start. Having credit cards, as long as the amounts of credit available are high enough to match that "magic" credit bureau number, and paying them off each month is the key too. If you have too much available credit, then it brings your credit rating down, if you don't have enough available credit, it won't raise your credit rating either. Every time you check your credit rating, or somebody else checks it, like when opening a credit card, or when applying for a home or car loan, you "ding" your credit rating down a notch. So checking it more than once or twice a year can be working against you, too.

I hope this helps. Good luck. I have had an excellent credit rating since I was 21 because someone showed me how. You can do it but it takes time.

Since you want to buy a house, talk to a mortgage broker and ask them what you can do to increase your score. They look at these all the time and they will probably have some good suggestions.

Some tips I was told in the months leading up to our house purchase:
-don't open new lines of credit, don't apply for new credit cards
-close any credit card accounts that you don't use. That account that you opened to get a new t-shirt and threw away the card? Don't just ignore it, call the bank and close it.
-don't close every account though. Keep 1 credit card account open, use it often, and pay it off every month. This is how you build good credit - showing that you know how to use credit wisely.
-same for your car, utility bills, rent, etc - you need to demonstrate a good history of paying all of these on time and in full.
-you also need to know the results of those disputed charges. If the credit agency researched it and decided that the report is accurate, your credit score will still reflect that disputed charge.

It's great you've been using your cc wisely for the last 3-4 months (although you just say you're never late, but do you pay the balance in full?), but credit histories are built over years, so if you or your husband weren't so responsible a few years ago, it's going to take time to recover from that. You can do it though! For really specific advice for your situation, do call up a mortgage lender and show that person your report.

We listen to and follow Dave Ramsey. We also use ones of his endorsed local providers (elp) for our taxes and he is great. I would recommend going to daveramsey.com and looking for an elp in your area that would be able to help you. I'd pick a financial advisor. 90% of his elp's will meet with you for free to see how they can help you.