Trying to improve my credit score, save money, and prepare for buying a house in a year.?

Question

Any good advice? I need help setting my goals, thinking of ideas to save money (ie invest or high interest savings account)

Any websites (free) than can help me?!

Answer 1

First. Make a budget. Keep track of your month expenses, distinguish what are necessary purchases versus nice to have. Try reducing "nice to have" spending and save as much as you can.



Second. Since you plan to buy a house in a year, you don't want to tie your money up in long-term investments. Check out some high interest rate saving accounts, for example www.etrade.com



Third. Get a copy of credit report from each of the 3 credit bureaus and pay to get one of your score, so you know what you are working with. Go through the credit reports and follow their instruction to make corrections when necessary.



Forth. If your credit score is 740+ then you are in good shape. If 680+ not too bad, but you will be paying slightly higher interest rate to borrow for your home. Make sure you continue to pay your bills on time to keep your score up.



Fifth. Make a realistic estimate on how much money you can save by the time you make the purchase. Then use the mortgage calculator on this page http://money.aol.com/calculators/mortgages-home-finance to help you figure out how much money you can afford to borrow. This will help you get a realistic idea on the price range of homes you should be looking.



Remember there are some extra costs for owning a home:

- add about 3% of the price of the home for closing costs.

- if your down payment is less than 20%, you will be required to purchase mortgage insurance

- check out home insurance for your area. be considerate of any special coverage like huricane, flood, earth quake etc.

- you will also be paying property tax each year for your home.



Insurance and property tax could vary quiet a bit on the zoning, county, school district etc. If you are not particular to one area, you may want to compare various neighborhoods for the best situation.



As far as whether you should "acquire" more credit at this time, it is difficult to advice without knowing your current situation. A person's credit should be proportional to his/her income. If a person is making $1500/month and has credit for $50,000, then it is actually a negative for credit score. The general rules about credit:

1. If you have a bunch of charge cards (Master card, Visa, Discover, A/X, department stoes, gas stations etc), try to consolidate and reduce number of open accounts. Try get rid of department stores and gas stations cards and charge all purchases to major credit cards. If you have several major credit cards, then consolidate them into 1-3 accounts.

2. Staying loyal to a credit account will increase your credit score. So if you are deciding which of the Visa or Master Card account to close, keep the one you have the longest.

3. Do not be attempted by 10% store discount and opening more store credit accounts. Each time a company make such inquiry to your credit history is a negative to your credit score.





Best wishes.

Answer 2

i stopped reading the first answer after the sixth step but that step about closing accounts is absolutely WRONG. you almost if not never want to close an account. it doesnt help not even if its a derog account. i closed all my accounts including the derogs and i lost like 20 points once the last derog account was paid and closed. had i kept them open i could have kept those points and built my credit by the bureuas seeing that i didnt max out the limits. you need the history especially if its good. bureaus like to see balances at 30% or less of the limit but if you can please dont go over 50%. right now you will need at least 3-6months of good history to get lenders to trust you since you have no history. go with a credit card from your bank. they will gladly give you a student account or you can go the route of secured credit card. either will help. building credit and maintaining it takes knowledge and patience.

Answer 3

my boyfriend is going throught the same exact thing. money is not the issue though, credit is. he has bought everything with cash his entire life, and has NO credit whatsoever. he has purchase a car with a CD and is paying that off. we also go some new furniture, which that is easy to get approved for and to pay off... less than 100 a month easy. do whatever you can to establish some credit. it takes atlest a year for it to mean anything to a creditor if your buying a house. and its not alwas easy. get whatever you can afford on credit. also if a credit card does not go over or meet 1000 dollars it wont show on your credit, and remember as long as its not 60 days over due then it is not negative on your credit. BUILD CREDIT is all i can give you advice on. if you need anymore help feel free to email me

Answer 4

Get a couple credit cards pay off the minimum for 6 months and then pay the remainder off, that helps your credit alot.

Answer 5

Hi,



Check out http://financeguru.consumerspot.info for some useful info and tips. on building your credit score quickly Good luck!

Answer 6

check out www.daveramsey.com