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Trying to establish credit for a first time home buy

I'm a young adult who has just opened a secured card and a sprint account to build credit. At this point I'm almost certain I have no credit, but I plan to enhance that in any way possible. I'm finding houses for sale in my area anywhere between 45k and 60k that I hate to pass up. Some are rehab, which I will do if within reason. Most are just priced low for the "depressed area" I currently live in.

1. How can I build my credit to qualify for a loan as soon as possible?

2, What else should I focus on to qualify? (employment, credit lines, income, etc.)

3. Any other advice you can offer.

I know if I go through FHA I can qualify by this time next year after I've been employed with my company for two years, but I'd prefer to get this under way as soon as possible. Instead of feeding my savings account I'd rather be putting that money toward a mortgage.
  • January 22 2011 - Port Richey
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Answers (7)

Hello,
Thanks for your question.  It's a good one.  I think Maryanne can help you,
she is out of my office and is very good at getting people qualified for a loan.

  • January 25 2011
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First Thing - remember you don't have to have a mortgage to buy.  Look into the seller's willingness to do a Lease-Purchase contract.  This allows you the flexibility to "rent-to-own" andexperience the neighborhood before pulling the trigger and being tied down to the house. 

Second Thing - Beofre you follow advice about raising your credit score that is not based on your specific credit report and situation, you need to have your credit report run through an additional tool like Credit Analyzer or Credit Detective.  Many lenders have access to these tools but you have to ask some of them. It can be costly,but some will offer it with the cost of the credit report.  It will pinpoint exactly what actions will raise your score. 

I strongly suggest you get accurate info specific to you before you set a course based on supposition. 

Take care, and let me know how things turn out.
  • January 24 2011
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Were you in school before this job?  If not, was your old job in the same line of work?  If your current job does not need specific training or is not completely different than your previous job you may not need to wait.

I am guessing the lender you are working with already asked these questions but just in case they did not.
  • January 22 2011
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I agree with getting at least one more card -- maybe a gas card.  Remember, you may not need a two year history if you went to school for your specialty....
  • January 22 2011
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I've heard that opening a gas card is a good way to go.  Use it frequently and try pay your balance off in full every month.  It may be okay to keep a small balance of around 25% of the limit, but certainly not more than 50%.  That should get the ball rolling.

Hope That Helps!

Aaron
  • January 22 2011
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I recommend that you open at least 1 more credit account. Also, keep a small balance on the card. Try to keep the balance always less then 30% of the credit limit.
  • January 22 2011
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You are doing the right thing as far as establishing credit.You may already  qualify for a FHA loan. This may help you along the way and visit all the links: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre03.shtm

Happy funding, Rudi
  • January 22 2011
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