HELOC and Credit building

[Andrew Schafer]

Been working on my credit for close to 2 years now. With covid, and work changes I got buried in credit card debt and behind on bills. Now my credit debt is gone, and paid off auto loans. Just got accepted for my first credit card since I put my foot down to get out of this hole. My credit is still not great. I'm trying to prep to buy a house then probably do a HELOC on my current home. So from what I can tell I need my credit over 700, but is it out of the question to expect to be able to get a conventional loan on a new home, then a HELOC on current home to prep for renting around the same time with a shaky credit history? Also any advice for rebuilding credit in a short time? Working on my debt to income ratio. And planning to do a 20% down on the new home.

[Brittany Minocchi]

If you just got approved for your first credit card, how did you have credit card debt? Or do you mean this is the first card you've been approved for since paying off the other cards? If the second one is right....why did you apply for a new card instead of using the cards you already had? 

To buy a primary, you don't need a 700. You'll get a better rate and better terms, but you don't HAVE to have that high of a score. If you're not selling your current home when you apply for a new mortgage, can your income support 2 mortgages? Can your income support 2 mortgages plus a HELOC payment?

As far as rebuilding your credit, my advice would depend on what it looks like now. It sounds like you've already made some positive moves, which is awesome! Paying down your debt, keeping credit card utilization as low as possible (but ideally below 10%) and NOT closing or opening any new accounts is a good place to start. If you think of any questions, feel free to shoot me a message.