Question about credit - JeepForum.com
Search  
Sign Up   Today's Posts
User: Pass: Remember?
Advertise Here
Jeep Home Jeep Forum Jeep Classifieds Jeep Registry JeepSpace Jeep Reviews Jeep Gallery Jeep Clubs Jeep Groups Jeep Videos Jeep Events Jeep Articles
Go Back JeepForum.com > General > General Discussion > Question about credit

Savvy/Currie Aluminum Control ArmsRockridge 4WD IS Taking Zone Offroad Suspension Lift Kits ZONE 4.25" combo lift for TJ available at Rockridge4w

Reply
Unread 05-12-2012, 04:53 PM   #1
YJ_Squared
Registered User
1995 YJ Wrangler 
 
Join Date: Mar 2012
Location: Wayne, WV
Posts: 103
Question about credit

To make a long story short, I messed my credit up and finally got everything paid off today after paying off and on between jobs for a couple years.

Me and the wife are looking into buying a house that has been in her family for quite awhile and the guy that has it now is offering it at a steal. As of a couple months ago my credit score was 578 (no shame here lol) and a guy I know that works for a lending company said that with my income I need about a 620 score.

My question is how long can I expect my score to go up that ~40 points in your alls experience?

__________________
1995 YJ, just getting started.
2012 F150 FX4 Tow Rig
2003 Kawasaki KFX 400
YJ_Squared is offline   Reply With Quote Quick reply to this message
Unread 05-12-2012, 05:04 PM   #2
billzcat1
Chicken in a Turkey Suit
2003 WJ 
 
Join Date: Oct 2008
Location: Redmond, WA
Posts: 8,537
Any adverse reports (Collections) will take 7 years to drop off. Mine got messed up from some bad decisions I made about 7-10 years ago, it was great when they finally dropped off. With those reports on my credit I couldn't get my score over 675, even with 5 years of perfect payment history on every card I had and a perfect history on my car payments.

I would use some of your credit cards, maintain a small balance like $500. Don't pay in full every month, just pay what you've purchased on the card for the month. It sucks that the best way to build credit is to pay interest to somebody. What companies want to see is that A)you are responsible with your credit, using less than half your available balances, B)that your payments are on-time, and sadly C)that they have a chance to make money off you by charging interest. It's important to maintain some balance on a credit card/LOC and show that you will be a profitable customer for them.

For your home loan, varied credit types and things like good history on an auto loan are going to more important than your credit card history. Your best bet right now is to find out where you are at. I used to check my credit score once a month (feature was free with my bank account) and some months it would increase 20 points just because I paid a card under its 50% mark or paid something off. You might have boosted your credit a lot by paying some of those debts in full.
billzcat1 is offline   Reply With Quote Quick reply to this message
Unread 05-12-2012, 05:09 PM   #3
YJ_Squared
Registered User
1995 YJ Wrangler 
 
Join Date: Mar 2012
Location: Wayne, WV
Posts: 103
Thanks for the reply. Sounds like you have been in a similar situation. So the bad stuff won't go off my credit report for 7 years but I can still increase my credit score?

I actually got a credit card last month that is supposed to be for rebuilding credit. The interest is kind of high but it only has a limit of $300. Sounds like that will get me going in the right direction. Also sounds like I might have to wait a little while on a home loan because the only things on my report are credit cards and student loans.

Would buying a vehicle actually help me out in that aspect? Affording it is not a problem because I am blessed with a good job, its just getting the loan.
__________________
1995 YJ, just getting started.
2012 F150 FX4 Tow Rig
2003 Kawasaki KFX 400
YJ_Squared is offline   Reply With Quote Quick reply to this message
Unread 05-12-2012, 05:24 PM   #4
billzcat1
Chicken in a Turkey Suit
2003 WJ 
 
Join Date: Oct 2008
Location: Redmond, WA
Posts: 8,537
Yep, been down the ****ty credit road and took a long time to build back up. I still have a lot of debt but I have an almost top-tier credit rating. You most definitely can improve your score from where you're at!

An auto loan is going to help, but if you get an auto loan now you will be shooting yourself in the foot with a really bad interest rate on a high-dollar principle. If you wind up at 12, 15 or even 18% on an auto loan (yes they exist) you will be paying hundreds of extra dollars every month just for the interest.

I would check your credit score now, use your rebuild-it credit card for about 6 months, see where you're at. Then try to get an auto loan under 10% (which is doable on mediocre credit) and work on that while maintaining good credit card discipline. Another thing to look at is your wife's credit. If hers is spotless and yours is crappy, do a joint application on the car now, get the good interest rate on her credit and boost both your scores with a history of making on-time payments. We just did that in Dec when we bought my wife's new car. My credit turned out better (now that the stuff has dropped off) so I was the primary but she is listed on the loan too. If her name was first, we got 7.99% on the loan. With my name first, 3.99%. And it builds both of our credit scores while we pay the car off.

Sadly, there's no quick fix for your credit score. It takes years to get things back in line. You have to think in long-term plans. I know you want to buy a house NOW but it might not be possible. If you do get a home loan with a low score, you'll be in that hazardous sub-prime mortgage/predatory lending risk group. So, you get a high interest rate and an adjustable rate mortgage. Then if Prime Rate goes up 1 point, your house payment can go up $500 and the bank doesn't have to give you a loan modification.
billzcat1 is offline   Reply With Quote Quick reply to this message
Unread 05-12-2012, 06:05 PM   #5
YJ_Squared
Registered User
1995 YJ Wrangler 
 
Join Date: Mar 2012
Location: Wayne, WV
Posts: 103
Yeah patience is for sure key. The house can wait because we have a pretty decent living situation right now.

Here in about 6 months I may have to start shopping for a TJ using the excuse it will help my credit lol.

I really appreciate your input, it been a big help. As I am sure you know, it feels like the weight of the world has been lifted off my shoulders and I am going to enjoy being debt free for the most part.
__________________
1995 YJ, just getting started.
2012 F150 FX4 Tow Rig
2003 Kawasaki KFX 400
YJ_Squared is offline   Reply With Quote Quick reply to this message
Unread 05-12-2012, 06:30 PM   #6
AlumaDoo
Registered User
2000 WJ 
 
Join Date: Mar 2012
Location: Arena, WI
Posts: 30
Banks are stingy these days, and aren't willing to take on high risk loans like they were 10 yrs ago. Keep paying things down and maintain low balances on any cards you use. You'll no doubt have to have a down payment somewhere in the 10% range. The banks will also study your debt to income ratio. In other words, you need to be worth a lot more than you owe. If you can get by with the vehicles that you have now, and just pay cash for stuff for a couple yrs, you'll be on the right track. Save up for that down payment.
AlumaDoo is offline   Reply With Quote Quick reply to this message
Unread 05-12-2012, 07:11 PM   #7
nwiTJdave
Registered User
 
Join Date: Dec 2008
Location: Indiana
Posts: 1,533
Is the person selling the home able to keep that offer on the table for say a year or more? My advice would be to get to zero debt (if you have any left) and then save up as much cash as possible. Don't go out to eat and become hermits. The key is to get as big of a downpayment as possible. If you can fork over over 40% of the home on a down payment most banks won't care what your credit score is (to a reasonable extent).
__________________
www.militaryjeepers.com

This is for fighting, this is for fun.
nwiTJdave is online now   Reply With Quote Quick reply to this message
Unread 05-12-2012, 07:45 PM   #8
muddr1
Registered User
1999 TJ Wrangler 
 
Join Date: Dec 2009
Location: Weare, Nh
Posts: 463
Another way to go see if you can rent the house with an option to buy.
__________________
If we knew what we were doing it woulnt be called research
Albert Einstein
There are no rules here, were trying to accomplish something.
Thomas Edison Keep Calm,Chive On
muddr1 is offline   Reply With Quote Quick reply to this message
Unread 05-13-2012, 09:51 AM   #9
bigred33
Registered User
1999 TJ Wrangler 
 
Join Date: Apr 2009
Location: duluth, georgia
Posts: 1,156
Figure 6 months after you got square before your score will start to inch back up.
bigred33 is offline   Reply With Quote Quick reply to this message
Unread 05-13-2012, 10:17 AM   #10
AmbuGrl
Web Wheeler
 
AmbuGrl's Avatar
1998 XJ Cherokee 
 
Join Date: Oct 2009
Location: Virginia Beach, Va
Posts: 2,409
First thing you need to do is obtain your credit report from all 3 agencies. (Annualcreditreport.com) Verify that all of the corrections that you said you paid off are showing. If they aren't then dispute the ones that havent been corrected. It may take up to a month but they will fix the report to show the updates. After they are all corrected THEN pull your score to see where you are at.
__________________
- HM1(SW/AW)Ret USN Dec 23,1992 to Dec 31, 2012

I drive an XJ, and all of my power windows work :)



2000 Pontiac WS6 - DD
DD (Mine) Sold - 98 XJ Moss Green
(His) - 92 YJ December 2013 YJOTM

Sold - 95 ZJ
Sold - 97 XJ Red
Sold - 98 XJ


USN Jeep Club Hull #36
NAXJA #3700

Quote:
Originally Posted by RacerX View Post
WTF is Clockspring??? my Jeep has digital clock
AmbuGrl is offline   Reply With Quote Quick reply to this message
Unread 05-13-2012, 08:10 PM   #11
YJ_Squared
Registered User
1995 YJ Wrangler 
 
Join Date: Mar 2012
Location: Wayne, WV
Posts: 103
Thank you all for all the help. Looks like I've still got a ways to go but I am for sure on the right track!
__________________
1995 YJ, just getting started.
2012 F150 FX4 Tow Rig
2003 Kawasaki KFX 400
YJ_Squared is offline   Reply With Quote Quick reply to this message
Unread 05-14-2012, 09:25 AM   #12
Whybu1
Lets go Penguins!!!!
 
Whybu1's Avatar
2002 WJ 
 
Join Date: Apr 2002
Location: Camas, WA
Posts: 3,206
Quote:
Originally Posted by YJ_Squared View Post
Thanks for the reply. Sounds like you have been in a similar situation. So the bad stuff won't go off my credit report for 7 years but I can still increase my credit score?

I actually got a credit card last month that is supposed to be for rebuilding credit. The interest is kind of high but it only has a limit of $300. Sounds like that will get me going in the right direction. Also sounds like I might have to wait a little while on a home loan because the only things on my report are credit cards and student loans.

Would buying a vehicle actually help me out in that aspect? Affording it is not a problem because I am blessed with a good job, its just getting the loan.
Watch out for "credit rebuilding" cards. They are no differant than a regular card other than they tend to be a bit more lenient on who they approve but have the higher rates. If you have a regular card that is the way to go.
Whybu1 is offline   Reply With Quote Quick reply to this message
Unread 05-14-2012, 09:49 AM   #13
YJ_Squared
Registered User
1995 YJ Wrangler 
 
Join Date: Mar 2012
Location: Wayne, WV
Posts: 103
Quote:
Originally Posted by Whybu1

Watch out for "credit rebuilding" cards. They are no differant than a regular card other than they tend to be a bit more lenient on who they approve but have the higher rates. If you have a regular card that is the way to go.
Yeah I understand the higher rate thing. I did my research before getting one. It only has a credit limit of $300 so it won't be too bad.
__________________
1995 YJ, just getting started.
2012 F150 FX4 Tow Rig
2003 Kawasaki KFX 400
YJ_Squared is offline   Reply With Quote Quick reply to this message
Unread 05-14-2012, 10:22 AM   #14
KeeptheJeep
Registered User
2004 WJ 
 
Join Date: Jun 2007
Location: Detroit
Posts: 613
Find out if the seller is willing to do a land contract. Pay them for a few years and then when your credit is better, get a traditional loan from a bank for the remainder. If you want to move in soon, this is a great option.

Screw all of that credit card balance and buying a new car crap. Sounds like a quick way to get in trouble again.
KeeptheJeep is offline   Reply With Quote Quick reply to this message
Unread 05-14-2012, 10:25 AM   #15
YJ_Squared
Registered User
1995 YJ Wrangler 
 
Join Date: Mar 2012
Location: Wayne, WV
Posts: 103
Quote:
Originally Posted by KeeptheJeep
Find out if the seller is willing to do a land contract. Pay them for a few years and then when your credit is better, get a traditional loan from a bank for the remainder. If you want to move in soon, this is a great option.
Unfortunately, he won't do this. That was the first thing I asked because of my situation. I do not think he is in a huge hurry. The house isn't exactly on the market, the owner just offered it to us for a very sweet deal.
__________________
1995 YJ, just getting started.
2012 F150 FX4 Tow Rig
2003 Kawasaki KFX 400
YJ_Squared is offline   Reply With Quote Quick reply to this message
Reply

Quick Reply
Message:
Options

Register Now

In order to be able to post messages on the JeepForum.com forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.
User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.
Password:
Confirm Password:
Email Address
Please enter a valid e-mail address for yourself.
Note: All free e-mails have been banned due to mis-use. (Yahoo, Gmail, Hotmail, etc.)
Don't have a non-free e-mail address? Click here for a solution: Manual Account Creation
Email Address:

Log-in

Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.


Thread Tools






Jeep, Wrangler, Cherokee, Grand Cherokee, and other models are copyrighted and trademarked to Jeep/Chrysler Corporation. JeepForum.com is not in any way associated with Jeep or the Chrysler Corp.