Richard - How Do I Improve My Credit in order to buy a house?

[xkrazybaby67x]

I am looking into buying a house Summer 2010.

We want to use the California Veteran's Loan, but I know that income/credit still come into play? Is there a minimum credit score?

I don't know a lot about credit.... what is a "good" score?

I understand with the Veteran's Loan you don't have to put money down, but I am still planning to. I'm just REALLY nervous about getting approved for a loan.

I plan to put 10k down. Is there a recommended percentage to put down? Can that get me a lower interest rate? What is a good interest rate? lol.

How do I check my credit score for free somewhere? I have the annual credit report, but that does not list the score? Does USAA do this somewhere? I know that some banks do

What steps do you recommend towards improving credit?

If I have credit cards I don't use should I cancel them? Or keep them open?

What is a good debt to credit ratio?

ummmmm......... okay those are all my jumbled and babbling questions. TIA!

[Amy]

I just wrote an article on homebuying and can send it to you if you'd like. It won't answer all of your questions, but it has some good (I think) information.

This part of it is most relevant:

Understand the true costs of poor credit and make sure your credit report is solid. Go onto myfico.com, brightscore.com, or the websites of one of the three major credit reporting companies (TransUnion, Experian, and Equifax) to get your credit report and score as well as a breakdown of things you need to do to improve your credit. Heed the suggestions given and continue to check your credit score and make improvements as needed. When buying a house at the national average cost of $287,500 (according to the U.S. Census Bureau), a credit score in the range of 620-674 could cost you an additional $324 in interest per month, or $116,949 over the life of a 30 year fixed mortgage than a score in the range of 720-850.

[Amy]

And I would keep credit cards open- if the balance is 0, it reduces your credit to debt ratio.

Recommended is 20% down, if you don't use the VA loan and don't put down 20% you'll be responsible for PMI (private mortgage insurance) until you've paid the 20%. And military members can get their information from brightscore for free if they get login information (check with your base family support center).

[xkrazybaby67x]

Originally Posted by Amy I just wrote an article on homebuying and can send it to you if you'd like. It won't answer all of your questions, but it has some good (I think) information. This part of it is most relevant: Understand the true costs of poor credit and make sure your credit report is solid. Go onto myfico.com, brightscore.com, or the websites of one of the three major credit reporting companies (TransUnion, Experian, and Equifax) to get your credit report and score as well as a breakdown of things you need to do to improve your credit. Heed the suggestions given and continue to check your credit score and make improvements as needed. When buying a house at the national average cost of $287,500 (according to the U.S. Census Bureau), a credit score in the range of 620-674 could cost you an additional $324 in interest per month, or $116,949 over the life of a 30 year fixed mortgage than a score in the range of 720-850.

PMing you! I would LOVE a copy of your article!

[xkrazybaby67x]

my credit score is 647

[J.Ski]

Originally Posted by xkrazybaby67x my credit score is 647

While it could be better, that's not a bad score. Did you pull the score from bright score? There should be an explanation of exactly why you're score is what it is. Paying down any balances you have and making sure all you're payments are on time will help improve it.

[Dianna]

So did you have to pay on brightscore for your credit score or was it free?

[J.Ski]

Originally Posted by Dianna So did you have to pay on brightscore for your credit score or was it free?

On Ft. Lewis there's a financial readiness office and they have the username and password to get it for free. I'm not sure if your base has something similar. If it does you can try contacting them.

[Dianna]

huh, I will have to go ask. Thanks guys!

[xkrazybaby67x]

Originally Posted by J.Ski While it could be better, that's not a bad score. Did you pull the score from bright score? There should be an explanation of exactly why you're score is what it is. Paying down any balances you have and making sure all you're payments are on time will help improve it.

i'm not married yet, so i'm not "military". i got it from expedian. when i was in college i missed a few bills so i have 4 bad points on my record for the 4 cards i had at the time. they're all paid off now. boo.