How to improve credit ratings?

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How to improve credit ratings?

Question: Hello,

I want to buy a modest house. My credit rating and score are good. I have spotty merchant (mostly medical) reported debts on record. Most of them happened when I was unemployed and going through a divorce. They made it to my credit report before I got a job and consider them repaying. How can I counteract and improve on these negative credit items in my report? What type of loans would improve my credit score? There are several types of loans (signature loans, personal loans etc.). Which of these loans would reflect postively on my credit rating and score?

Thank you in advance for any help, tips and advice.

Answer: If you have debts you have not paid, pay them. Sometimes you can get them to remove the nasty from your credit report in return for your paying what you owe.

Otherwise wait until all nasties are removed from your credit report (7 years?)

Then get at least one “bank” charge card like visa and charge something every month and pay it on time. Don’t have too many charge cards. And don’t have charge card balances which are near the max.

Pay *all* your bills on time.

Live in same house/apartment for 3 years. Work at same job for 3 years.

Save up enough money for a down payment.

Then apply for a home loan and you will get the best interest rates.

They will see that you are a stable person who pays their bills on time is not over extended (live within your means) and has good credit.

If you are in a hurry to get a home loan, can’t wait, and have bad credit they will really stick it to you with high interest rates, balloon payments, and variable rate loans.

Also get a house which has much lower payments then the max monthly amount you qualify for.

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How to improve credit ratings?

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