moving4ward

Best strategy to raise score to attain morgage?

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Hello, thanks in advance for your help!

I'm trying to improve my credit so I can qualify for the best mortgage rate possible. I'll be a first-time homebuyer. I have downpayment saved, but I know my credit isn't the best. I have a few negative items and a few positive. I'm hoping to get advice on how to strengthen my credit profile, as well as what strategy to take to deal with the negatives. 

My scores are 643, 651 and 679.

Negative Items:

- I have an account with Progressive Mgmt for $1108 opened 8/2016. I think this is a collections agency for a medical bill from 2016.

- I have two accounts with a credit union for $1065 and $232 both opened 1/2013. (I thought items only remained on credit reports for 7 years?) This is 2 credit union accounts I let get overdrawn then they closed on me and I never paid it off.

- I have several late payments on 2 vehicle loans that were opened in 2012 but I caught up and paid off the loans in 2017. 

Positive Items:

- I had a vehicle loan opened in 2011 and paid off in 2014 with no negatives

- I had a student loan opened in 2002 and paid off in 2012 (again, I thought items only lasted 7 years?)

- I had a Bank of America line of credit opened in my name by my parents when I was a child in the 80's and it was closed in 2012 (obviously I'm wrong about 7 years)

So as you can see, I don't have much credit history at all. I think I need to deal with the negative items and build up some credit history by taking out some credit cards or new car loans. So I'm asking for advice in 2 areas...

1. What is the best way to deal with the negatives? Should I call and offer to settle if they delete the items from my reports? Should I hire a credit repair agency to handle them? 

2. What is the best way to build up more credit? Should I apply to credit cards? Should I buy a new car?

 

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You  est approach would be to contact the negatives.  Try to negotiate a "pay for delete". Even if they won't deal, pay them off.  Wait.  In 6 months or so, your scores will climb.  Don't take out new credit.

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Negative items can only be reported for seven years while positives will usually show for ten years which can be to your advantage.

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22 hours ago, willingtocope said:

You  est approach would be to contact the negatives.  Try to negotiate a "pay for delete". Even if they won't deal, pay them off.  Wait.  In 6 months or so, your scores will climb.  Don't take out new credit.

Thanks for the feedback. I contacted the negatives and was able to get one deleted. The other 2 refused to delete but I paid them off so they should show $0 balance. 

I'm curious about your advice to not take out new credit.... I've heard that I should take out a credit card and an installment loan to start building more positive credit history. Why do you think I should not?

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5 hours ago, texasrocker said:
 
 

Negative items can only be reported for seven years while positives will usually show for ten years which can be to your advantage.

That makes sense. It turns out the negatives with the credit union opened in 2013 but didn't go negative until 2015, so I still have 2 more years on those. 

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New credit will help you get new credit cards.  Doesn't help so much with a mortgage.  The scores that CRA's report to the consumer are "sucker" scores.

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