How do I increase my credit score with in 2 years to buy a home?

I have $20000 of loans. I graduate in 2 years. How good does my credit have to be to be a first time home buyer?

Public Comments

1. Read the books by Stephen Snyder _"Credit After Bankruptcy".. Great book, and applies to all people who need to better their credit. Good free emailed newsletter too.
2. You don't say what your current score is, but with all that's going on now in the news with the subprime market. it will be more difficult for those with bad credit to get loans. I would suggest paying off the loans asap, continue to pay all your bills on time in full every month. Your score will eventually rise. Have 3 to 6 months of living expenses set aside in a good savings account. Then, save at least 20% for a down payment on a house. This will prevent you from having to get mortgage insurance on the loan.
3. I'd rent cheap until I pay off my bills. Your score is dependant on your use of credit. In other words, you have to pay a lot of interest on time to get a good score. (What a waste of money) Maunal underwriters, like credit unions, do not consider score and you're lack of monthly payments will help you afford a house payment. For more, go to daveramsey.com.
4. Can you pay off your loans in that time? That amount of debt will decrease your score, but it's not the end of the world. If you pay your bills on time, you'll be fine. You do want as little debt as possible and as big of a down payment for a better rate though. the book here http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Fexec%2Fobidos%2FASIN%2F1600200400&tag=thestateofart-20&linkCode=ur2&camp=1789&creative=9325 is a great resource for money issues, especially credit rating and banks. It shows you how to capitalize on the system and make some cash in the mean time- great for college students...
5. If the 20K you owe are all in student loans, it is considered as an investment loan. If that 20K is all on credit card or other consumer debt, then it will significantly affect your credit score. However, watch out for your debt-income ratio. Banks look at overall loan payments vs income for credit worthiness. I had a credit score of 700 right out college, I paid my bills on time - online auto-bill pay is great. It took me 3 years to save for my home purchase. I just purchased my new home last month, it was tough. Reputable banks are now stricter with their qualification guidelines. They require that my mortgage payments to be less than 40% of my gross income. The better your score, they lower the rate you will get - best rates for scores 750+. Also, no-downpayment deals are no longer around. Be prepared to save at minimum 5% for a downpayment, another 1-3% for closing cost and 3 months worth of emergency funds. Local banks also prefer first time home buyers to take home buying seminars (offered by non-profits orgs). It helps prove that you are responsible and willing to work hard to keep your home. The classes are also great for educating buyers on scams and non-advertised deals from banks. For example, because I got class credit for the first time home buyers seminar, I became qualified for loan programs to help lower my cost and another bank offered to lowered their rate by a fraction of a percent. A fraction of a percent for me was $50/month = $600/year = $18K/term of loan. This may seem a lot, but the days of "no-doc, no-down and ARM loans" caused the current foreclosure crisis. It is now time for responsible homeownership and for consumers to be more educated about their finances. Just watch your spending, save and pay off your consumer debts. It's not that hard.
6. Hello, if you want to see your credit score increased, I recommend you’re never late on your payments. Try to pay more than the minimum payment every month. Also, avoid opening up more lines of credit or making any large purchases such as a car within the two years you plan to purchase your new home. A credit score of 700 and up is considered a “good” score. However, the higher your score the more loan options will be available to you. I have included a link with more great information regarding tips about how your credit score is determined, as well as how your credit score is determined. I hope this answers your question. Good luck!
7. should be above 660 and of course you will have to meet all of the other standard requirements!!!