How to Build Your Credit Score Fast to help buy that home faster,
Simple credit cards will help build your credit within 6 to 8 months. One $500 credit card limit will do the trick, but make sure you pay off that card balance on time and in full. I like to pay off all my credit card bills in PRO TIP #4: two weeks before the bill is due! You must pay on time!
PRO TIP #1: Set up the min payment in your online bank bill pay every month on the 1st or 3rd, so you never miss a payment, and then you can pay off the rest the next day.
PRO TIP #2: Buy things only with your credit that you purchase anyway during the month, like food or your cable bill. You are going to spend that money anyway?
PRO TIP #3 If you do have some or a large amount of credit card debt. Pay off the lowest balance credit card first. For example, If you have $500 on one credit card and $2000 balance on another credit card ~ Pay off the credit card with the $500 balance first. This is a way to keep track of your spending.
And 2 of the 5 factors are the most important:
PAYMENT HISTORY & AMOUNTS OWED
Improving your credit score is crucial to qualify for a mortgage to buy a house. Here are some more steps you can take to fix your credit:
- Check your credit report: Get a free copy of your credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion) and review them for errors. Dispute any errors you find.
- Pay bills on time: Late payments can negatively impact your credit score. Make sure you pay all your bills on time, including credit card bills, utility bills, and other debts.
- Reduce your debt: High levels of debt can lower your credit score. Consider paying off your debts, starting with the ones with the highest interest rates or the lowers debt on the credit card. PRO TIP #5: Try to call the credit card company to see if they will lower the interest rate for a year or two?
- Increase your credit limit: A higher credit limit can lower your credit utilization rate, which can improve your credit score. However, avoid increasing your spending to match the higher limit.
- Avoid opening new credit accounts: Each time you apply for credit, it can negatively impact your credit score. Avoid opening new credit accounts unless necessary.
- Use credit responsibly: Use your credit cards responsibly by keeping your balances low and paying them off in full each month. Meaning, do not go over board with spending on the credit card. PRO TIP#6: Use credit cards as a tool and not as a debt machine.
What is a debt machine? You may ask?
A debt machine is a term used for a person who has too much debt on one or 100 credit cards, who can make only the MIN payments and underwater in debt. You do not want to be this person in a million years!
Remember that fixing your credit takes time and patience. Keep working on improving your credit score, and you will be closer to qualifying for a mortgage to buy that first house.
What is a good credit score to buy a house?
How Long Does it Take to Fix or Build my FICO score and Then buy my First House?
3 years!
Around two or three years because the banks want to see how you can manage credit with 3 years of length of history.
Also, banks will look at your income and 2 or 3 year job length. The banks will really look at two factors for a mortgage: 1: Credit score. 2: Income. Quick Note: It's not based on income alone? There are doctors that can't get a mortgage because of their bad FICO score!