I am trying to get a mortgage after credit settlement plan
Hi,
I did a debt settlement program with my credit cards 3 years ago.I am finishing paying it. I also sold my home, and no longer have a car loan. I have one card that I didn't have in my debt plan, which i have a balance on and pay regularly.
I am trying to get my credit score up to qualify for a mortgage. Should I apply for other credit cards to increase my available credit to help my score? Or should I do an installment loan or take a car loan out on the car I have? would that help my rate go up enough to get a mortgage?
If there are any other ideas how to now have enough of a mix of credit to get my score over 600 I would appreciate it.
Thanks,
Jen
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please stay away from high interest traps like payday or title loans. they are not worth the cost
in my opinion you have a ways to move to get good rates and approval on a mortgage. My advice would be to focus on the fastest possible payoff of your current debt, rather than taking on more different payments, pay off those existing ASAP. A single line of credit in good standing with no balance will be your best boost to your score. once you see the benefits of this, i would consider looking into new lines of credit where you can play the ratio game. with no outstanding debt your score will rise all on it's own and will get you bigger credit lines and better terms no matter what kind of credit you apply for.
for what it's worth: revolving credit lines (cards) do give you better boost to score than auto loans. payday/title loans are pointless, dangerous and expensive. I was in your shoes 2 years ago. I turned a 580 into a 754 and i'm going to buy my house this year (finally!).. I did it by paying down my debt first, then increasing my card count from 1 card with a $350 limit, now I have 9 cards with tens of thousands in credit that I DON"T USE.
Remember this: people with good credit PAY, people with bad credit CHARGE. I hope this has helped. Best of luck to you!
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New credit cards will increase your limit, thus reducing your ratio and increasing your score, you are correct this does work. However a score under a 630ish those cards are going to be limited balances, have annual fees, and be of low quality in general. No outstanding balances would be much more beneficial to your score In My Opinion it will get you to your goal faster.
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