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    mindsecho's Avatar
    mindsecho Posts: 6, Reputation: 1
    New Member
     
    #1

    May 8, 2008, 08:44 PM
    Credit score
    According to experian my credit score is 621. Which I thought was really bad. I just found this online:
    FICO score from 620 to 679 is OK. You won't be denied but the terms are not going to be too generous. Still you are officially a nice person. But you better check the increase credit score page.

    So why is it that I can't even get a stupid loan for 2000.00 to pay off debt to improve my score? I can't even get a credit card I always get denied. Why?? Can someone help me?
    Clough's Avatar
    Clough Posts: 26,677, Reputation: 1649
    Uber Member
     
    #2

    May 9, 2008, 03:59 AM
    Are you trying to get money so that you can pay off credit card debt? I went to one of the banks (credit union) through which I have one of my credit cards. I wanted to raise the limit. We were successful in raising the limit. In the course of finding out about raising the limit, they gave me a copy of my credit report for free.

    I don't know why you are having trouble, and believe me, my heart goes out to you! I am in the midst of my own financial battles right now! But, if I were you, I wouldn't be going online to check things about your own credit. I have heard, and I do believe it to be true, that if you make inquires about your own credit score, that just because you have made such an inquiry, it counts against your score. Whereas, if someone else, like a financial institution, makes an inquiry, it doesn't count against your score. The response that you received online also doesn't seem to be as professional as it could have been.

    Hopefully, others will be along to address your concerns.
    mindsecho's Avatar
    mindsecho Posts: 6, Reputation: 1
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    #3

    May 9, 2008, 04:19 AM
    No I don't own a credit card trying to get one to raise my score and establish some credit.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,302, Reputation: 7692
    Expert
     
    #4

    May 9, 2008, 04:48 AM
    Banks look at many things besides credit score, other credit card payments if you are trying to get a credit card, amount of unsecured to secured debt and debt to income ratio. If for example you already owe X amount of dollars, and only make 6 dollars a hour, even with a good score they will only loan you a certain amount based on how much you already owe.

    Now this is the better banks who don't charge double digit interest rates. An some "loan" companies that are more bottom barrel, will start you off with smaller amounts and see if you establish a history with them.

    If you have a debt now, pay it off with regular payments, getting another loan is not always the best way to raise your credit score,
    mindsecho's Avatar
    mindsecho Posts: 6, Reputation: 1
    New Member
     
    #5

    May 9, 2008, 05:15 AM
    I guess you could say I really don't have any credit, I have never had a credit card, car loan, mortgage etc, I checked my 3 credit reports a while back and I had under 3500 on there and they were medical bills because I have no insurance and blew out two disks in my back and didn't have a choice but to go. I'm a single mother and I'm paying an arm and a leg for rent with no support for my son so I wanted to try to get some credit established because I want to try to buy a house, we live in a small town and I can still buy a 3 br house for under 45000.00. But I don't know how they expect you to get credit when they won't let you try to get it. I have no bills really because all my utilities are included in my rent... my car is paid for... its a 1998 suv in great shape I would think that would be good collateral too! I guess I always thought having things paid off instead of payments was better... now look at me... I pretty much screwed myself lol by NOT wanting a bunch of payments.
    twinkiedooter's Avatar
    twinkiedooter Posts: 12,172, Reputation: 1054
    Uber Member
     
    #6

    May 9, 2008, 10:45 AM
    Try getting child support through the child support enforcement agency in your city. That would help you pay some of your monthly bills. I know that didn't help answer your question, but I thought I'd remind you that your son is entitled to support money. Just because the father says he can't pay anything - let him tell the judge that sob story and see how far he gets with it.
    progunr's Avatar
    progunr Posts: 1,971, Reputation: 288
    Ultra Member
     
    #7

    May 9, 2008, 11:07 AM
    You mentioned a little further down that you have medical bills. If these are on your credit report, then they have to be delinquent. I know of no entity that reports current medical accounts.

    With medical collections on the report, I believe is the reason you are being turned down.
    That, and as Fr_Chuck mentioned, your debt to income ratio is probably out of whack, especially when they factor in those unpaid medical bills.

    Finally, a credit card will do more at this point to lower your score than it will to raise it.
    It will increase your debt to income ratio as you place charges on it, it will raise your amount of available credit, and last, the on time payments to that type of account do little to raise your score. To get some real bang out of paying on time, you need an installment type loan like a car or mortgage as those result in more positive points than any revolving or credit card type of account will.
    mindsecho's Avatar
    mindsecho Posts: 6, Reputation: 1
    New Member
     
    #8

    May 10, 2008, 09:49 AM
    Thank you, I have a nice car but its paid for I actually talked to a place yesterday about trading it in and gettng a smaller one so I will have a few payments that would help. Thank you for all your answers!
    Dr D's Avatar
    Dr D Posts: 698, Reputation: 127
    Senior Member
     
    #9

    May 10, 2008, 01:54 PM
    Dear mindsecho - A 621 FICO score should be adequate to secure an FHA loan to buy a home. The minimum required investment from the borrower is 3% of the sales price, which can come from your savings, a secured loan on your car, a gift from a relative, or a down payment assistance program. Since you don't have traditional trade lines on your credit, alternative credit can be used, such as timely payment of rent and utilities. Stable and sufficient income will also need to be verified. Contact a reputable Mortgage person to discuss the particulars. They can run you through the Automated Underwriting system to see what FHA says. Any judgements on your credit would have to be paid; collections, maybe, maybe not. Also if you pull your own credit it will NOT affect the score; if a lender pulls it, it could lower the score. If you pay off old collections, that action could in the short term actually lower your score, because the activity on the derogatory item is now recent, rather than old. The scoring system is time sensitive. If you just want a $2000 loan, join a Credit Union and put your vehicle up as collateral. I wish you the best.:)
    Loan_Guy's Avatar
    Loan_Guy Posts: 83, Reputation: 6
    Junior Member
     
    #10

    May 10, 2008, 06:54 PM
    thank you, i have a nice car but its paid for i actually talked to a place yesterday about trading it in and gettng a smaller one so i will have a few payments that would help. Thank you for all your answers!

    If you are trying to get a mortgage, trading your car in on something just to have payments is WRONG! WRONG! WRONG! The issue is your debt-to-income ratio could suffer, but not knowing what's on your credit report and your current income, I'm just speculating. If you need to build credit, try getting a credit card through your bank or credit union. If that fails, ask why. You could then try a local store such as Sears, etc. but keep the balance very low (ie. Charge a pair of socks or something else you NEED and pay it off over the next month or two).

    You could go through FHA for the home, but the collections may haunt you if they are current. If they are not, it could hurt you to pay on them because it would update your date of last activity. How's that for a catch 22?

    Talk to a respected mortgage person and see what you should do. Ask around for references before you just dial blindly from the phone book, as there are some mortgage folks who don't understand the credit system well enough and could actually hurt your credit.

    LG
    mindsecho's Avatar
    mindsecho Posts: 6, Reputation: 1
    New Member
     
    #11

    May 11, 2008, 05:37 PM
    Thank you thank you thank you for all your helpful hints. I rethought the car thing, you are right! Anyway, why would I want a car payment! The "house" I'm considering buying, is a victorian and it will also be my business, it's a small town and I want to turn it into a bed and breakfast, So when I apply for a mortgage, is there a different kind of loan to apply for since it will be a business also?
    Clough's Avatar
    Clough Posts: 26,677, Reputation: 1649
    Uber Member
     
    #12

    May 11, 2008, 06:17 PM
    Yes, there are business loans for something like that. Someone else would know more about those.

    Are you sure that you would be able to operate it as a bed and breakfast according to all of the requirements of the town that there might be to establish and run such a business? No doubt there would need to be a license or licenses, insurance and zoning issues as well as others...
    Dr D's Avatar
    Dr D Posts: 698, Reputation: 127
    Senior Member
     
    #13

    May 11, 2008, 07:01 PM
    If you are looking to buy a "primary residence" FHA is probably the best vehicle for that purpose. FHA is not intended for commercial property. The following is an FHA guideline: "A qualified property must be predominantly residential in use and appearance. Any nonresidential use of the property must be subordinate to its residential use, character and appearance. A property, any portion of which is designated or used for nonresidential purposes, is eligible only if the type or extent of the nonresidential use does not impair and/or remove the property's residential character and appearance."

    If you want to buy a HOME and can qualify on your present income, then do that. If you are seeking financing for a business venture, you will have to look elsewhere. Good luck.:)
    jerichowood24's Avatar
    jerichowood24 Posts: 3, Reputation: 1
    New Member
     
    #14

    May 14, 2008, 05:12 PM
    Try Capital One, they have a credit card that is designed for those who have bad credit, or no credit. They report to all three credit agency's to improve your score. Once your score raises, then try and get a car loan or a personal loan. They effect your score more positively than anything else.
    hailey1hayden2's Avatar
    hailey1hayden2 Posts: 4, Reputation: 1
    New Member
     
    #15

    May 22, 2008, 01:06 PM
    If I did a voluntary repo, How bad would it hurt my credit?
    rd_hs's Avatar
    rd_hs Posts: 1, Reputation: 1
    New Member
     
    #16

    Jul 11, 2008, 12:25 PM
    Comment on progunr's post
    Accurate

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