Finance Blog
How to Build Credit in Order to Buy a Home
How to Build Credit in Order to Buy a Home
Equifax Credit Team
Q: My husband and I are saving for a down payment on a house which we plan to purchase in three to five years, but neither of us exist in the credit world. We have applied for three different credit cards—one to help with groceries, one student one that’s designed for those without credit, and one with our bank. We were denied all three. What other ways can we build credit in order to get a credit card and one day get a house?
David Bach: I would go to a national bank like Bank of America, Wells Fargo, Citibank, or Chase. Walk in, meet with a manager, and say, “Our goal is to buy a home in three to five years, and we need to build credit.” The national banks have programs designed to help people like you build credit so they can buy their first home. They have a program that will walk you through. They will help you build what’s called a secured credit account. If you have a checking account that you are saving in now to buy the home, they will give you a credit card secured by the checking account. Maybe it’s a $500 credit card to start. Once you pay that bill on time they will release the security and actually give you a real credit card. That will start to build your credit report. The banks want first-time homebuyers. So go to a national bank and ask for a path-to-home-ownership program. That’s what you are looking for.
Watch David Bach’s Today Show segment. (Question at 2:20 mark.)
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The entire credit reporting business is a scam. I have paid down my credit cards as suggested, haven’t opened any new accounts and my score has not increased to get me into a new home. I take the tips suggested by credit bureaus and those tips end up hurting my score rather than help it!First you need credit, fine, got that. Oh but now you need more credit, yeah that’ll do it! Bullshit.
Julie – no one really knows how to answer any questions about how to improve your credit. I have excellent credit, but for the ‘various types of credit” I am considered poor. I have asked 2 representative from each of the 3 credit bureaus and none of them could help. Some of them said to eliminate 1 of my 5 revolving accounts, the others told me I didn’t have enought. It is all bullshit…at the end of the day, pay your CC’s in full each month and pay bills on time. Thats what I learned to focus on.
Show them that you are a good payer and reliable affiliates by not delaying your payment and following the guidelines of every member. This will truly affect your record and definitely will make you qualify to have financial assistance.