If you have 3 Credit Cards – and one of them is “Max’d Out” and One has a zero balance, and one you pay off monthly… you could be pulling your score down! Look at the following example:
Credit Card Balance versus Available Credit
Visa with $10,000 balance and no Available Credit
Discover with $300 Balance you pay off monthly
MasterCard with $0 Balance
That Visa Card with no Available Credit = Lower Credit Score
The smarter move is to spread the balance between Cards ($5,000 each). This makes it look like to the COMPUTER SYSTEM that checks all of this – that you are NOT max’d out! This will = Higher Credit Score!
Everybody wants to get RID of credit – but please know that you need at LEAST 2 credit card accounts, and at least 1 installment loan to get the minimum credit scores needed for a home loan! The current minimum scores are 640 – however we do offer loans for folks with 2 scores over 620.
Just getting negative credit off of your file will not get your score up high enough for the 640 score! The BEST idea we’ve heard of recently is this: Go to your Credit Union. Open a Secured Credit Card. If you want a card with a $250 limit, then put $500 in a savings account tied to the card. By putting TWICE the amount of the limit – most institutions will NOT pull your credit, which means you will not have an inquiry.
We want to AVOID inquiries, as they generally pull your score down at least 5 points PER PULL that are more than 45 days apart.
Minimum credit scores for the NC Housing First Time Homebuyer program was 600, and we could help people get into houses if they qualified for the program and had the scores.
On May 1, 2013 that changed. It changed from a couple of perspectives… first the NC Housing program changed SIGNIFICANTLY. The changes include higher credit scores, more flexibility for homeownership status, and a better downpayment / closing costs assistance program.
REMEMBER, if you are a First Time Homebuyer you might qualify for a 3% Grant for downpayment! For more info, click here! If you have questions about your credit scrore, and live in NC, contact Steve and Eleanor Thorne, at 919-649-5058.