Next Fall I will be getting married. My girlfriend currently owns a home and has some equity in the house. We will be selling the home and buying a new one next fall. She has great credit (score of 785). I have not so great credit (score of 605). The reasons for my poor score were late payments, and having 2 credit cards maxed out. I will be paying off both cards over the next couple months. In the past year, I've had no late payments. By summer I will be debt free, and she will just have the mortgage payment. I'm curious about what will happen when we apply for a mortgage? We have substantial income, and will be able to put down about 20% - 25% on our home. I understand a quick way to raise a credit score is by paying off maxed out cards. Is this true? Will we be penalized for my credit? Thanks.
Paying down your debts will help your score alot, believe me I know I went from 540 to 677 in 5 months, I paid down debt and closed several accounts, as time goes by the lates will not matter as much to your score. You really shouldn't have any problems and with that type of downpayment you will be fine Mom
Thanks for the info.... One more question, with the info above, do you think we will have to pay a higher interest rate?
If you did it now with a middle score of 605 you may pay a little more depending on what type of loan program you used. But if you plan on doing this when you stated I am sure you will get a very good rate. Also putting down 20%-25% would probably get you a decent rate right as you sit now.
