How do I build credit to get a better loan?

Question

So I am looking to buy a house in a year, I have a 681 credit score but I want it to be in the 700 when I apply for the loan. Any tips given would be super helpful

Account Closed · Answer

Hey @Jeremy Torres-Jimenez, here's an article that had some great information on quickly building credit, specifically for someone in real estate investment: https://sparkrental.com/how-to...

Best of luck to you!

Kevin Paulk · Answer

Understand what makes up your credit score and then work from there. Here is the breakdown

35% payment history- How reliable you are, late payments kill you

30% amounts owed - How much you owe and how much credit you have available.

15% length of history- How long have you had credit. longer the better

10% new credit- older accounts better they show reliability.

10% types of credit - student loans, medical bills, credit cards, car loans

Amberly Jones · Answer

To quickly increase your score - get the lowest balance you can on all of your debts, especially your credit cards. I see significant bounces between 3% usage and 10% usage - most people say stay under 30% but the lower you go the better and does truly have a big impact. That can be done quickly if you have the funds and reflects very quickly (within 30 days of lowering your balance you will see a higher score) Another short term/quick move is to impact the average age of your accounts (higher average = better score). Do you have any newer accounts you can close, so that older accounts increase your average?

Michael Ryland · Answer

@Jeremy Torres-Jimenez there is a lot of info out there on this subject. Look on YouTube and you’ll see many videos on this subject. An easy trick is to call your credit card companies and ask them to raise your limits. You’re not actually going to use it but it gives you more available credit or leverage. You’re trying to create a gap between your balances and your available credit. This makes you a more attractive client to the banks.

Mike Reynolds · Answer

I had used the same bank for 25 years. I thought I had it going on. I didnt need no stinking credit cards, I was a cash pay kind of guy. They never turned me down because of my record.

Then I had a mentor ask me what my credit score was. I said "I have no earthly idea. What does it matter anyway? I can get whatever I want from the bank. "

I appears a lot.

I learned a lot in the last 5 years about credit score. The I refinanced my private residence. I took 5k out of my house (because they made me or wouldn't do the loan) and dropped my note from 950/month to 700/month. Same great bank too. It appears they didn't care as long as I was uninformed and they were getting a higher interest rate lol. That is 3k per year I can use elsewhere. Just on ONE loan.

You are not in bad shape. It wont take much to get you into 700 territory. Take the advice on BP like I did  and use a credit checker like Credit Karma or something else to keep track of your score. At that score, you can get credit cards to increase your limits. Buy food or just spend 30-50 a month on what you would have normally bought with cash. Then pay it off a day or two before it is due. In a  year you will be in 700 territory. Then the fridge goes out....go to Lowes or somewhere else and buy it on credit interest free. 6 months-12 months whatever, just pay it off. You could probably get Amazon credit card. Buy 2 or three things and pay them off? They will give you 2-3 thousand worth of credit. It all adds up.

Jeremy Torres-Jimenez · Answer

@Amberly Jones thank you for the advice

Chris Szepessy · Answer

On time payments and keep your credit cards at less than 30% utilization...but more preferably, pay them off every month.

How do I build credit to get a better loan?

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