Will this help?

Question

I have a low credit score in the 400s. I have only one major credit card and also 2-3 bills that I need to pay off... I am currently paying on all of them with payment plans so that it can show that I am paying them off.

My husband is doing the same thing.

We are looking to move into a home by the beginning of next year by doing so...

Do you think that our credit score will increase over these next few months so our credit scores will be high enough to close on a new home???

Answer 1

Borrowers are a lot stricter now and getting a loan is not easy.  Credit reports are updated every quarter.  It will take more than just paying off your bills to get your credit rating to the bare minimum needed for a loan.  Banks look at a lifetime history not just current.  I would say 3 - 5 years before I would even consider applying for a home loan.

Answer 2

To put it short, no way will your score go up enough in a few months to qualify for a home.

You both need to be in the 600 and up range and that will take at least a couple of years of hard work.

Answer 3

Uhmm I think they'll eventually go up after you pay off the debts, however I doubt the score will go up that fast. Just pay off the debts ASAP and don't incur anymore. Save as much as you possibly can because you're bound to need a lot more downpayment with a less than perfect score plus you'll be looking at higher interest rates

Answer 4

It is really hard to get a loan these days.  It has been reported that some companies will not give you a loan unless your credit score is over 700 points.  However, to work on  paying off your bills is the right thing to do, however with credit it is a catch 22, because it is when you make bills and  pay them on time each month that helps to boost your credit score. I  have read a report on managing and saving money and getting out of debt that I think would be very helpful for you and your husband. The report is only $8.00 and will help you now and in the future.

Answer 5

If they are in collections unless you get a pay to delete letter then they will still remain on your report for 7 years.  I would think 3-4 years before your credit is up enough to even consider getting a home, and then you will need a down payment and closing costs. 400 is just short of the dungeon or bottom of the score. (Lowest is 350) What you are doing is correct, but it will take a few years of constant consistent paying on time to raise your score. You need to achive a score in the upper 600's minimum

Answer 6

It will help, but plan on bringing in a large down payment.

Answer 7

No.  Not only will you both need to have cleared up all the derogatory times, you will need at least 24 months of consistent, on time payment history to even begin to see improvement in your score.

Work on building a good credit history for the next 5 years.  Start putting a set amount in a savings account every payday for your future downpayment.