Ways to increase credit score by 3 points?

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My fiance and I are trying to buy a home. The loan representative from the bank said that if his credit score went up 3 more points (to the 620 minimum) she could offer us $ 150,000. We have heard different opinions on how to increase his score quickly. Paying off his outstanding debt (from 6 years ago) would cost only a little over $ 500 but he will have no revolving accounts on his report. Someone else said to open a department store or jewelry credit card, but I do not want him to get declined and worsen his credit. We would like to try to get in the housing market within the next 6 months. Any experts in the field with advice would be appreciated.

And please, if you are going to judge and/or insult, don’t waste your time or mine and go to another question please.

2 Comments
  1. Reply
    Chris
    July 21, 2011 at 1:34 am

    I know opening another credit card account is not the way to go. The bank sees that as more of a risk – because now you will be able to borrow more money.

    Why not ask the loan rep from the bank what he/she thinks is the best way to increase your score? After all, that is the person who is reviewing it.

    Good luck!

  2. Reply
    bdancer222
    July 21, 2011 at 2:14 am

    It’s a bad idea to open or close any lines of credit right before you apply for a mortgage. Opening a new credit card isn’t going to give you those 3 points. The credit inquiry will actually ding his score a few points.

    It isn’t as easy to get approved for credit cards as it use to be. But he would have to use that new credit card for at least 6 months before it even started counting in his FICO score.

    If that 6 year old debt is a defaulted account that was charged off and/or turned to collections, paying it off won’t improve his score at all. The damage is done and will remain for the balance of the 7 year reporting period, whether paid, settled, or unpaid. The mortgage lender will require that all derogatory accounts be settled before approving a mortgage. You may as well negotiate a settlement. Or wait till it ages off before applying for a mortgage.

    You may need to put off the house. He really needs at least 24 months of consistent, on time payment history to improve his score. He needs to get a credit card, even it he has to go with a secured card. Use it and pay in full every month. This will give him good payment history.

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