I have been able to completley pay off my 3 MC's and my AGF personal loan. I have a secured Orchard (since 2000) never late limit of $1300. A CapOne $2k limit since 2003 and another CapOne $300 limit since 2003. My scores in the for this month are EQ 623 TU 671 EXP 674 Those scores are B4 payoff - so I'm expecting to bring my EQ up to where my TU and EXP currently sit - and hopefully my TU and EXP will hit 700. I have one paid collection on my EQ and EXP - AMEX paid in 2003. (YEAH I'm DEBT FREE - thanks to this site and a LOT of hard work) Now I want to build a little more credit by opening a VISA card or a Department Store card. I won't apply until I see an increase in my scores after the new zero balances are reported. So, my question - what do you recommend? I've read where you need to have a mix of credit...and a Store card is the only thing I don't have... My goal is to buy a house between July 06 - December 06 (that's when I'll have enough savings for 20% down) Thanks in advance for your input!!
congratulations! i would choose a store you actually shop at - i hear target is a good one. why 20%? there are many good loan options out there that don't require 20% down.
Thanks Jenz - I want to put down 20% because I'm old (LOL I don't FEEL old tho) - I've never owned a home and really want to do it "right". I want to get a 15 yr mtg and when I'm ready to buy I'll be 40 (YIKES!) I don't want to pay a mtg until i'm 70! I would feel more secure having some equity early on ~ and there are other things like college for my daughter I'll have to deal with in 10 years... On the store card - we do have a super target here - but I hardly go. Do you know of any other "easy" ones? I wish there was a list of store cards that shows at what score they approve!! I'm all for a Sears card - but I know you have to have super credit to get one...or so I've heard!
you could do an 80% first and 10% second mortgage. put the funds you would have otherwise saved for the downpayment into a college fund for your daughter. or you could do 100% mortgage - commonly called an 80/20 so you wouldn't have PMI.
are there any drawbacks other than having a higher payment? i've heard about the 80/20 - but don't know too much about it - do you get the second loan from the same lender as the first? (i know - silly question ;p)
drawbacks as to financing more than 80%? no other than having less equity. typically you would get the loans from the same lender but you are not required to. talk to a mortgage broker who can advise you of programs available. my goal is to go rural development in my area because i can get 100% financing with no pmi - but i need a score of at least 660 and i am 550.
ih8debt, Because you're "old" (which I doubt) is exactly why you should have a 30-year mortgage for 80% of your value and never pay it off. But, you need to invest the other money, not spend it. Read this article, and perhaps browse Ric's website. Once you retire, you won't be able to get the money out of the house for things like college educations or medical bills. If you have your money OUT of the house, you can use it to pay the mortgage and other bills if you have a job loss, medical bills, etc. I've already followed Ric's advice, refinanced my house (not 80% of value because I wanted to keep my payments reasonable), taken the money out and stashed it away. It's a good feeling knowing that if work gets too bad, I can quit or take a leave of absence. If we have a catastrophe, I have the cash to handle it. It's a better feeling than having a house paid off and no money to pay bills.
To answer your original question, it appears that the scoring models would like you to have a store card. Take jenz's advice and get one at a store where you shop, so you will use it. You might want to get another Visa or MasterCard with higher limits as well. or work to get your limits increased on your current cards.
Hedwig - Wow - that article really opened my eyes! It makes total sense. Ric is so right about "having a mortgage paid off" being burned into your head! Thanks SO much for providing that link. I'm printing the article out and keeping it in the front of my credit binder for reference. And I'm also going to take Jenz and your advice about getting a store card. Again - thanks for the info It amazes me how much infomation you folks have to share!
Re: Re: Visa or Dept Store Card? Jenz - trust me - if *I* can get there, ANYONE can get there. You are very smart so I have no doubt you will suceed!
Re: Re: Visa or Dept Store Card? butch - awesome article. i am a huge advocate of financing as much as you can when it comes to a house! i'd rather have my money so i can access it than in equity i can't touch when i need it. <<huge high-five from jen>>
Re: Re: Visa or Dept Store Card? Actually, the article was from me, not Butch. Sounds like something he might post, though. Ric Edelman has a radio show in the DC market that I listen to whenever I can. I love his advice.
Re: Re: Visa or Dept Store Card? Hedwig - what station? is he on the air on a specific time? I'm in the same area... BTW - I picked up "the truth about money" at the library today, i'm HOOKED!
Re: Re: Visa or Dept Store Card? Whoops - One more thing - When I applied for my first CapOne card it was for "a limit upto $2k" And I got the $2k limit about 3 months after I opened the card. My 2nd CapOne is for a limit upto $1k, current limit is only $300, and I'll ask for a limit increase in a few weeks. My Orchard card has been increasing $200 just about every 5 months, and it's secured. I have a few months left on that to finally get an unsecured card for good payment history/not going over my limit (yeah - I went over my limit early last year ) I would love to increase my limit on the CapOne with the $2k limit - but will they increase a card that was only advertised to give me a $2k limit? Would you recommend I just sock drawer it and go for a new one? Thanks!
Re: Re: Visa or Dept Store Card? WMAL (AM 630), Saturday mornings 10-11:45 AM (maybe only until 11:30 now, I don't remember). I love WMAL. It's about the only station I listen to during morning and evening drive. Great traffic reports, too. Right before Ric (9 AM on Saturday) is a show about legal matters--mostly trusts, estate planning, etc. Ric occasionally gives seminars in the area as well. He talks about them on his show from time to time. He now has "The New Truth About Money" and several other books.
Re: Re: Visa or Dept Store Card? I don't know a lot about Cap One. I had a card with them when I had my credit problems, and it didn't do much (of course, I WAS having problems). I canceled it, didn't have a Cap One for years. Now I have a $20K card from them with 3.99% BT for life of transfer. I don't know if I could have kept the other card (under $4K limit) and worked it to $20K or not. You may have to apply for another card. I think if you do they sometimes let you combine the cards. What I'm not sure about is if they'll let you keep the history and get the better terms. Maybe someone else will chime in.
Re: Re: Visa or Dept Store Card? ih8debt, If you keep reading Ric's books and listening to his show, you might have to change your name! You'll find that what is important is building wealth! Debt in and of itself is not necessarily bad. You saw one example with the mortgage. Let me give you another example. I got an offer on one of my cards for BT at .99% until paid. Yes, you read that right--less than 1%. So I maxed the card with BT (got a check payable to me). I invested the cash, and I can assure you that I'm getting more than 1% on it. I only pay the minimum each month. If I paid more, it would be like the mortgage. I'd be paying off 1% money when I could take that extra money and invest it. Now, I agree that going out and running up cards for vacations, dining out, fancy "toys," etc. is bad. That's bad debt. Why? Because it's not building wealth. But taking money, investing at a higher rate than you pay back is not bad debt. It's building wealth, and that's what we should be focusing on.
Re: Re: Visa or Dept Store Card? You are very, very smart. That was an awsome move on your part - like I read all the time here - credit is a tool. Too bad I didn't realize this ages ago (no sense beating a dead horse, huh). I've forgiven myself for my carelessness and now it's time to start building. I will keep readiing Ric's books - the library has them all. I will also consider changing my ID here LOL. I have long out grown the bad spending habbits. Now I'm working on saving. My savings are currently in a HYS account. Once I read some more of Ric's idea's, I'll figure out what I'm going to do. Now - what radio station is he on? WTOP? I don't know of any other talk radio station in the area.
Re: Re: Visa or Dept Store Card? WMAL. I posted it above, it probably got lost in my ramblings. 630 AM--in my opinion better than WTOP. I really like both morning and evening drive. And if you're as old as you imply, you'll know who Fred Grandy is. He's on the morning drive show. I wasn't always this smart. I didn't start saving until I was in my 40s. And that was a while back. I'm just now starting to think that I can retire some day.
Re: Re: Re: Visa or Dept Store Card? Ah AM Radio, I'm not THAT old! But I do remember when AM was the only stations I could get growning up! I usually listen to music on the morning drive and WTOP on the way home. It calms me in the traffic, go figure! Knowing that you were in your 40's when you started gives me a lot of hope. I will be 40 soon, and I have an 8 year old. I'm doing this alone, one income, and nothing else. So when I say I'm old, I me in a financial sense. But now that just went out the window when I read your post!
