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I am trying to buy my familys home but I have a fair credit score.  What can I do to improve my credit score quickly.  I have two loans that I pay on a monthly basis.  Should I try and pay these off or is it better for me to keep paying on them monthly?  One loan is $5000 and my car loan is $10000.  These are my only wto debts and I do not own a credit card at the present time.  Can anyone help me?

  • February 03 2011 - Warwick
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Answers (4)

If both loans are installment loans (car loan certainly is), paying them down or paying them in full will not improve your scores.   Paying them monthly and establishing a good payment history will help over time.

What is your current score?   Do you have any other credit history (derogatory) that is dragging you down?   Do you have any other accounts that report a balance aside from the two that you mentioned?   (collection for example)
  • February 03 2011
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Do you know your scores? The score requirements for FHA is 640 and 620 for Conventional and USDA.  

Having two scores could be a problem.  If you have an open credit card, charge somthing small on it. Pay it off when the bill comes in.  Even a $1.00 charge can trigger credit score activity. 

Paying off the $5,000.00 probably won't increase your score.  Is this on a credit card?  The rule of thumb is keep credit card balances lower than 30% of your credit limit.  If this is the case, movng the balance to anoher credit card may help right away.   

Are here any errors on the credit report?  Somemes you can prove an error and the creditor can issue you a correction letter.  You may be able to get a rapid re-score on any errors.   


  • February 03 2011
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The score requirement is NOT 640. It's lower than that. See Justin's advice. If your score is at least 600 you may have a good shot.

I have found that paying your revolving (credit card) balances below 25% of the max makes for a higher score.
  • February 03 2011
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Keep paying on time and I would probably suggest one more account but first see if you qualify.  As you can see different lenders have different lowest scores for example we will go down to 620 middle of the 3 scores or lowest of 2.
  • February 03 2011
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