I finally broke down and paid the $45 to get my credit scores today, I figure if I'm going to buy a house in the near future I should know where I stand and where I need to be.

The information I got was interesting, and the reasoning behind the scores was even more interesting. The length of my credit history was listed as a negative factor by TransUnion and Experian, but a positive by Equifax. My oldest account is 67 months old, which as it happens is exactly how long I've been > 18 years old. I suppose that is pretty short in the grand scheme of things though. What's really odd is that Experian, which gave me my highest score, listed no positive factors and 4 negatives. One of which being that my proportion of balances to credit limits on my revolving accounts is too high. TransUnion didn't think so - it's only 3%!

Now, a few questions -
- I've heard 720 is the score to shoot for. Will having a higher score affect the interest rates I get, or just make it easier to obtain more credit? I'm just wondering if I should make an effort to increase my score by not opening any more accounts, or if I can continue business as usual.
- My future wife most likely does not have the best credit. She only had one credit card until just recently, and she never used it because one time she sent her payment in and they took 11 days to process it and charged her a late fee. Other than that she has no negatives, but she's never had a car loan or a student loan or any sort of loan for anything. Her score is very likely lower than mine. If her score is substantially lower, would that negatively affect our ability to get a mortgage or the rates we are offered?
- We are looking for a house that will have a mortgage payment of 20-30% of our combined net income. Is that about right?

did you try the free credit report first?

Let me find the link..

Here you go:
https://www.annualcreditreport.com/cra/index.jsp

The above link is a result of mandate by the government.

the higher your credit score, yes, the lower the interest rate and the easier to get credit.

It would be good to have up to 40% of your income to go to mortgage..
but then again, that is just rule of thumb. It really goes down to how much you can save, and how much is your monthly bill (groceries, etc)..

As for your fiancee, you can call the cc company and ask for a one time reversal fee. most cc will do it for you. they give you back the late charges-

having a late charges will substantially lower your credit report. especially if she only have one cc, however, try the above link to get the credit number.

- I've heard 720 is the score to shoot for. Will having a higher score affect the interest rates I get, or just make it easier to obtain more credit? I'm just wondering if I should make an effort to increase my score by not opening any more accounts, or if I can continue business as usual.


The former. Your credit score can also affect your insurance rates as well. Recently I switched to AAA auto insurance which quoted a very low rate. They asked for my permission to pull a credit report, which I said sure go ahead. They couldn't tell me my credit score but I was in tier 1 (the best out of 8 tiers). That lowered my insurance premiums by about $120 over 6 months. Boy was I thrilled. So a higher credit score will help you get credit easier and lower rates as well.


- My future wife most likely does not have the best credit. She only had one credit card until just recently, and she never used it because one time she sent her payment in and they took 11 days to process it and charged her a late fee. Other than that she has no negatives, but she's never had a car loan or a student loan or any sort of loan for anything. Her score is very likely lower than mine. If her score is substantially lower, would that negatively affect our ability to get a mortgage or the rates we are offered?


Was she 11 days past the original due date or 41 (30 + 11) days late in making her payment? If she has a decent income but low debt, that would definitely help you when applying for a home loan. You should apply as the primary applicant with your future wife as the co-applicant.


- We are looking for a house that will have a mortgage payment of 20-30% of our combined net income. Is that about right?


Not sure, I'll ask Vic to look at this thread and offer his 2 cents :)

The free credit report is not available in NJ until September. All NJ residents are entitled to a free report once a year, but I don't think that includes the score. When I received free credit reports in the past (because I was a victim of attempted identity theft), I did not receive the score.


It would be good to have up to 40% of your income to go to mortgage..
but then again, that is just rule of thumb. It really goes down to how much you can save, and how much is your monthly bill (groceries, etc)..


I wasn't saying we're only ABLE to pay 20-30% a month, that's just what the payment would be on the price range we're looking for. Whether we pay more than or not depends on the interest rate we get and how much return we could get through other means of investing. Our monthly expenses are pretty low right now.


As for your fiancee, you can call the cc company and ask for a one time reversal fee. most cc will do it for you. they give you back the late charges-

having a late charges will substantially lower your credit report. especially if she only have one cc, however, try the above link to get the credit number.

It happened several years ago, so it's probably too late to have the CC company reverse it. I'll have her get her reports and see if it's showing up. If it is, I'll have her dispute it. They deposited the check more than a week before the due date, I have no idea why she just rolled over and paid the late fee.

Edit: Rossman - she actually sent the check in well before the due date, it just wasn't "processed" until after the due date. So it wasn't anywhere near 30 days late, it was more like 2 days late according to them.

If that bill was less than 30 days late, I should not show on her credit report. If she has low debt to credit ratio, she should have an ok score. If she has had the card open for 36 months or more, that card will be able to be used to show her credit-worthiness by using the 3-year payment history. She doesn't actually have to have made payments, they just need to be less than 30 days past due to show that she has paid the card as agreed.

Typically, when buying a house, if you can qualify on one person's income, only that person's credit score will matter. If you need both incomes to qualify, *most* banks (in my experience) will use the *lower* credit score of the two of you to determine their rate. It's not that they *have to*, it's just that it means a higher rate which means more money for them... Shop around you'd be surprised the differences between banks, credit unions, and mortgage brokers.