us11csalyer

how can I spend 3k to repair my credit?

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I have 24,xxx in student loans which have 30, 90, 120 day late payments. A credit card with 300 dollar credit limit that I never go past 30% with and pay it off every month. Some medical bills that are around 1,300.

Experian: 574; EQ: 583; TU: 583

Here is my questions:

Will getting a 1,000 dollar secured credit card through USAA help my credit; and if so by how much?

will paying off private student loans that have 120 day late payments help my credit, or will it only help if I get them to remove the debt from my account?

Any other advice is welcome.

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Secured CCs carry a special code that FICO recognizes...they do not help your FICO scores. FAKO scores on the other hand don't care.

But, think about it...you're going to give someone $1,000 to hold onto, and pay them a fee for doing so.

Wouldn't it make more sense to put the $1,000 in a savings account or interest bearing checking account with a debit card?

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First, realize there are many different FICO scores. You need a mortgage broker to access your FICO Mortgage score...it might be better than you think. And, money in the bank (for a down payment?) will improve thatt more than another CC, secured or not.

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A credit score is only part of qualifying for a mortgage. DTI ratio is also important.

You may get a score boost by using $3k to pay down some existing debt.

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All my debt is 24k in student loans which is deferred for a year. I took care of my 7+ yr old debt with letters to the 3 cra. I also paid my hospital bills.

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I'm probably going to piss off some folks here but if you have student loans with late payments and virtually nothing in the bank, why would you take on the burden of buying a house???

No matter what FICO score you have, buying a home is almost always more expensive than you think and if you don't have all your bills caught up; at least enough down to avoid PMI and a good, solid emergency fund in the bank AFTER making the down payment then I would suggest that buying a house will end up causing you major problems.

In all humbleness, I suggest you read the post at the link after my signature.

Just my $0.02 of course; do what you want.

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Why does everyone assume he doesn't have any money in savings?

Yes, it will help you credit if you get a secured credit card. The larger amount of credit you get on the card the better it looks. FAKO FICO its gonna help in the long run i dont care what anybody says. You have to make sure the bank you getting it from does 2 things when getting a secured card.

1. Returns your deposit in full after one year of on time payments without you closing the account.

2. When your one year is up they keep you account open and migrate it to a unsecured credit card. In other words, the bank doesnt close your 1 yr. good standing account and open a new unsecured account.

I dont think you may qualify for a FHA loan if you have federal debt in bad standing like irs, school loans, ect.

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I'm probably going to piss off some folks here but if you have student loans with late payments and virtually nothing in the bank, why would you take on the burden of buying a house???

No matter what FICO score you have, buying a home is almost always more expensive than you think and if you don't have all your bills caught up; at least enough down to avoid PMI and a good, solid emergency fund in the bank AFTER making the down payment then I would suggest that buying a house will end up causing you major problems.

In all humbleness, I suggest you read the post at the link after my signature.

Just my $0.02 of course; do what you want.

:shock: I agree with Robert....houses are more expensive than you think. Having a track record of non-payment/late payments for student loans is considered by the banks a pretty good indicator of your payment habits for a mortgage.

The good news is this, you can rehab your student loans. Once you get straightened out with your student loan payments and a decent savings account, then consider buying a home.

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If you live in Austin TX.

A 800sq ft one room apartment is going for $950 a month (a $200 dollar/month increase from last year). A relative of mine just bought an 1900sq ft house in Austin and has payments equal to $950.

She plans to rent out 2 of the 4 bedrooms to cover her house payments. And she'll also get a tax break from interest and taxes. In this case a house makes sense.

If I was you*** For practice, rent a cheap decent apartment. After you pay the rent, put what would be the extra amount that a house payment would be, in a savings account. If you find out you can't come up with this imaginary house payment every month, then you are not ready to have a house.

(example , Let's say the house you want to buy has a monthly payment of $1000/month. If your current rent is $500 a month ..pay the $500 rent and also put another $500 into a saving account. If you can do this for a year, you can probably afford a house and you'll have saved a down payment at the same time.

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