In the “good old days,” (just last summer), you didn’t really need a credit score to purchase a home… TODAY, even FHA wants to see some “traditional” credit. If you are interested in buying a home in NC, then you need to re-think your budget, and re-consider having credit cards. By adding positive information to your credit report, with new credit cards that are used the RIGHT WAY – you can easily improve your credit scores.
We can do loans in North Carolina for folks with scores below 640. In fact, we can do FHA Home Loans NC for folks with two credit scores between 580 and 619. For those with scores between 620 and 639, we have even more options!
If you don’t have any credit to use, the first step is to establish some!
If you’ve had credit in the past, and for reasons neither of us really want to go into, your FICO score stinks, you’ll have a “hard time” getting a credit card from a major bank.
Here are some additional options for you to take…
Secured Credit Card
Secured Credit Cards will help raise your credit score. Most people concentrate on disputing “bad stuff” on their credit report. We take a different approach, and it yields higher scores. If all you have on your report is BAD credit remarks – the MOST important thing you can do is add POSITIVE credit information to the file.
It will cost you between $75 and $150 to add a secured credit card – it’s not free. But it’s much better than having only negative information on your file Well, first let’s talk about where you should NOT get one! Most Credit Unions do not report to all 3 Credit Bureaus, for that reason, we recommend that you contact a Bank. Capital One, Provident, Orchard and First Premier all offer these accounts. Bank of America and Wells Fargo offer secured Credit Cards too.
Go to Fingerhut and apply for credit. It might only be $150 bucks. Use exactly ONE HALF of the credit they extend to you and pay it back every month on time like clockwork. Ditto with a Secured Credit Card. If you can afford $300 – then go to your bank and get a secured credit card. You want to borrow NO MORE than exactly ONE HALF of the credit extended to you and pay it back on time.
We talk to someone everyday about this – and I always suggest that on a Secured Credit Card you want to pay the balance down to $10. That will mean you are paying a couple of bucks in interest every month – and that’s exactly the thing that is going to help your credit score go up faster…
Gas Credit Cards: They might be easier to get, but they often have very steep fees and should be used for one or two tanks a month!
Find a Credit Card Based Upon Your Score: There are cards that offer lower fees based upon Great Credit, and there are others that offer credit based upon No Credit. To get an idea of which companies might offer cards that are “just the right size” for you, we often refer folks to Credit Karma to look for these deals.
Ask Your Family: The Bank of Mom and Dad can help with some of this. If someone in your family has a credit card account (or two) that was opened after you turned 18, that has payments that have been made on time – and has no more than 50% of the available credit already charged… can add you as an authorized user to the account. We see this often when one spouse has good credit, and the other one doesn’t. Adding them to an established Credit Card that has good history on it will help improve credit scores for the person who doesn’t have much or any positive credit history.
We want to help you buy a home in NC! If you have more questions about ways to improve your credit scores, leave us a question, or please call Steve and Eleanor Thorne, 919-649-5058 We can do loans in North Carolina for folks with credit scores below 640 ! We help folks all over the state of North Carolina with home loans and the best mortgage rates. You can also get updates from us on Facebook and Google +