what is the best way to get 5 more points to my credit score?
I plan on purchasing a house in the September/October time frame and I want to get my credit score up to at least a 660 from 655. I have 00 that I can put towards one of two things....I'm wondering what will have the bigger impact on my credit...
First, I can completely pay off a credit card that is no longer active (AKA I can't use this card anymore) or Second, I can pay the 00 to an active credit card that would bring my balance from 94% of available credit to 65% of available credit. What would you suggest??
Also, am I correct in thinking that there is a pretty big difference between 655 and 660? It seems like everything I read indicates that a 655 is at the hi end of "fair" credit and 660 is at the low end of "good" credit - any thoughts?
Thanks!
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Pay down your current card and set up a payment plan with the closed account. The 94% of available credit is hurting your score immediately and you can get 4-8 points just by bringing down that balance. But mortgage lenders will not like seeing an unpaid-inactive account on your credit.
pay off the credit card and close it out, open lines of credit increase your debt to income ratio which negatively effects your credit…
even if the credit line isn’t useable, if its open, it will effect your credit
I would say no — not worth much of a effort in today’s market. You need $1000 for an emergency fund anyway — esp, if you are going to try to buy a house.
I keep hearing horror stories from people with scores below 700 (technically 720) having a real difficult time refinancing and doing first purchases. It may not last — the the credit market is still quite ugly. Excellent to perfect credit is the only sure thing.
To raise credit score
1. Always pay on time or ahead of time.
2. maintain low balances on credit cards
3.To boost your score: Don’t charge anything for at least 60 days before applying for a loan
4. keep your total potential debt to earnings load low – If you have a card with a $15000 credit line, you may ask them to reduce it to something more realistic, like $5000.
5. You should have a recent history of both installment or term (Car or house loans) and revolving credit.
6.To boost your score: Don’t close unused accounts when you transfer debt.
7.To boost your score: Consider opening another credit-card account or two, or taking out a car loan or small bank loan.
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