how to raise my credit?

rusty@saving · #1 (**permalink**) 11-04-2006, 10:12 PM

i recently got my credit score, and i need to raise it within 6 months in order to get a house with my wife. obviously, if my credit is better, than i will get lower payments and interest rate.
i am thinking about getting my first credit card, and making it something like a walmart cc, because i make 1 run a week to walmart, and always pay cash. this way i can just pay it off every week with the cash instead of paying at the register.
i have a little debt, nothing huge, and i would like to pay it off, but i was told that if i pay it off now, it might bring my credit down for a while before it can go back up. therefore, i am going to pay it off after i get the loan.
if anyone has any ideas, i would like to hear them. another 20-50pts would help out dramatically!! thanks.

abowers · #2 (**permalink**) 11-05-2006, 10:23 AM

Pay down whatever debt you and your wife have so your debt:limit ratio is better. Opening a new line of credit only 6 months before looking to buy a house might make a little dent in your credit, because I think they usually look at how many new accounts you've opened recently.

autoxer · #3 (**permalink**) 11-06-2006, 06:34 AM

Quote:

Originally Posted by rusty@saving

i recently got my credit score, and i need to raise it within 6 months in order to get a house with my wife. obviously, if my credit is better, than i will get lower payments and interest rate.

What is your score? Did you review your credit report to make sure everything is accurate? Have you also reviewed your wifes credit situation?

Quote:

Originally Posted by rusty@saving

i am thinking about getting my first credit card, and making it something like a walmart cc, because i make 1 run a week to walmart, and always pay cash. this way i can just pay it off every week with the cash instead of paying at the register.

That will show responsible credit use, but 6 months of history isn't very long.

Quote:

Originally Posted by rusty@saving

i have a little debt, nothing huge, and i would like to pay it off, but i was told that if i pay it off now, it might bring my credit down for a while before it can go back up. therefore, i am going to pay it off after i get the loan.

Huh? What kind of debt and who told you that?

Quote:

Originally Posted by rusty@saving

if anyone has any ideas, i would like to hear them. another 20-50pts would help out dramatically!! thanks.

Paying down credit card balances seems to be the quickest way of raising scores, because it quickly lowers your utilization, but make sure you understand what goes into the score so you know how to make the most of it.

Here is a pamphlet right from the horses mouth:
http://www.myfico.com/Downloads/File...20pamphlet.pdf
(There is a lot of speculation about what affects the FICO score, but only FICO really knows the formula.)

poundwise · #4 (**permalink**) 11-06-2006, 07:40 AM

Do not obtain a new credit card. While there are many factors that go into credit scoring and many of these are vague, one that is certain is that opening a new line of credit will lower your score for the short-term.

Pay down your debt. Paying it down or off will not lower your score and will be beneficial when your income and debt are reviewed by a mortgage lender.

rusty@saving · #5 (**permalink**) 11-06-2006, 09:01 AM

thanks for the good advice. i will take a look at my report and find out what i can pay off in 6 months. my score is 603....better than i thought.
my friend that does mortgages told me that paying off debt brings attention to them, as they have been stagnant for a while, something like that.
anyways, i will look into what i can pay off right now, thanks again for the advice!

abowers · #6 (**permalink**) 11-06-2006, 02:41 PM

As long as you make at least the minimum payment and make it on time, it will be an 'account in good standing' on your report. it becomes a negative item if you miss a payment or pay late.

If you get a free credit report (through the gov't website -- annualcreditreport.com) it will tell you some things that are potentially hurting your score -- i.e. card balances are too high ("available credit is too low"), opened an credit card account too recently, missed/late payments, time since oldest credit card was opened is too short, etc.

vishenda · #7 (**permalink**) 11-06-2006, 03:54 PM

Good day=)
Don't get a credit card, unless you know that you can make every payment on it. But first make that little debt, no debt before you get the loan. Make all your payments on time. And it will work out. And if you have to wait another 6 months than wait.
No guarantees, only time and good credit management will raise your score.

All the luck

instantinfo4you · #8 (**permalink**) 12-05-2006, 01:50 PM

I agree. There is no magical formula for raising your credit score. Getting a credit card is definitely not a solution. I have found that people who start off with a credit card with the intention of paying it all of in ful, usually end up with a bigger balance then they thought they would at the end of the month. I heard that when you use credit for purchases instead of cash you will spend up to 178% more than you would otherwise because it is just so easy. All you have to do is swipe that wonderful plastic, and you are on your way to a life full of debt.