Credit Score of 530: Home Loans, Auto Loans & More

credit score of 530

Increasing your credit score can seem overwhelming and you might even think it’s next to impossible. But you don’t have to settle for a low credit rating, even though with a credit score of 530, you have some work ahead of you to improve your rate.

Luckily, there are practical steps you can take to help raise your credit score. Let’s take a look at what you can expect with a credit score of 530 when it comes to credit cards and loans — and what you can do to boost your credit rating.

Credit Score of 530: Credit Cards

Attempting to get a credit card with a credit score of 530 can be difficult. You might be lucky enough to get approved, but you can expect to pay higher interest rates. You might also have to put down a deposit before receiving your credit card.

Another option you could take is getting a secured credit card with a reputable company. You’re required to put money down in advance, but it’s a great opportunity to easily build your credit score, and it can help you to make smarter financial choices.

Credit Score of 530: Auto Loans

With a credit score of 530, you can expect to pay a pretty high annual percentage rate (APR) on an auto loan. You might have to provide a large down payment and the dealership could even require you to have a co-signer for added security.

There’s the option of going to a “buy here, pay here” car dealership, but that doesn’t do anything to help build your credit. Plus, the amount you end up paying will be substantially higher than if you were to obtain a traditional auto loan.

Credit Score of 530: Home Loans

Buying a home with a credit score of 530 can be challenging. The Federal Housing Administration (FHA) offers loans with a 3.5% down payment to those with a credit score of 580 or more. If your credit score is lower than that, it increases to 10% for an FHA home loan.

For example, if you wanted to buy a $140,000 home with a credit score of 530, your down payment would be $14,000. With an increase of 50 points to your credit rating, it would go down to just $4,900. Talk about a great reason to build your credit!

How to Improve a Credit Score of 530

Now that you know what to expect with a credit score of 530, you’re probably wondering how you can improve your financial life by increasing it, right?

What you need is a simple, straightforward approach that gives you the opportunity to make small changes to improve your credit over time, and begin taking the right steps toward total credit recovery.

You don’t have to tackle credit repair on your own! Give us a call today at 1-866-991-4885 to learn more about one of our affordable credit repair programs, and we’ll help guide you down the road to better credit in no time.

Tips for Buying a Home in Your 20s

tips for buying a home in your 20s

Are you a 20-something-year-old who is looking to buy your very first home? We know it can be pretty overwhelming and confusing. Somewhere along the way, the home buying process may leave you wondering, “What in the world have I gotten myself into?” But don’t worry! We’ve put together these tips for buying a home in your 20s to make things easier!

1. Determine What You Can Afford

We’ve all heard it before, live within your financial means. This statement also applies to buying a house. As you look at homes, it is important to have a strong understanding of what you can afford based on your credit score and your financial history.

Look for properties that are within your buying capabilities. Buying outside of your finances capabilities can cause problems down the road affecting your ability to make mortgage payments and maintain good credit. When you buy inside your budget, you set yourself up for financial success.

2. Stash a Ton of Cash Under the Mattress

Storing cash under your mattress might not really be the best idea these days; the point is to start stashing your money away. In order to get a mortgage in this post-recession economy, the bank often requires a down-payment on your home of about 5%-10%.

If you’re looking at a $100,000 home, you’ll need $5,000 – $10,000 in cash at closing for the down payment. Plus, you’ll be expected to cover additional closing costs.

3. Build up Your Credit Score

Banks desire a credit score that is over 700 for anyone seeking a mortgage. The national average score is 695. You can’t raise your credit score in the blink of an eye, but we’ve put together several guides for those at various levels:

Figure out how many points you’ll need to raise your score then read the applicable guide above. It’ll give you specific strategies you can set in motion right away.

4. Apply for Grants and Payment Assistance

All of that credit score talk can feel really stressful! Here is some exciting news for you: There are grants and programs available to make it a little easier to purchase your first home.

Bankrate.com offers a list of nine ideas to help get you started:

  • FHA Loan
  • USDA Loan
  • VA Loan
  • Good Neighbor Next Door
  • Fannie Mae or Freddie Mac
  • Energy-efficient mortgage
  • FHA Section 203(k)
  • Native American Direct Loan
  • Local Grants and Programs

Each type of program has its own qualifications, so be sure to read up on each individual one!

5. Get Pre-Approved for a Mortgage

Many real estate agents will not even begin showing you houses if you have yet to be pre-approved for a mortgage. This is different from being pre-qualified. During the pre-approval process, a mortgage lender looks at your credit and income and writes a letter stating how much of a loan the bank will grant you once you make an offer on a home. A good real estate agent will help connect you with a reliable lender to get you started.

What questions do you still have about the house-buying process? We are available to answer all of your questions. Contact us at Info@GoCleanCredit.com or 480-991-4885.

Should You Pay More Than Your Credit Card’s Minimum?

should you pay more than your credit card's minimum

Most people are unable to buy the home of their dreams because of their poor credit scores. Having a large amount of credit card debt across one or multiple cards can present obstacles.

Some people feel they can only afford to pay their credit card’s minimum monthly payments, while others wonder if they should be paying more than that.  Today we answer the question of whether should you pay more than your credit card’s minimum and how paying more than the minimum offers many benefits.

The Two Main Methods of Debt Repayment

1. The Snowball Method

The snowball method works well for people who have a lot of credit card debt. First, you must check how much you owe for each card. Start off by paying as much as you can on the credit card you owe the least.

Once you’ve paid it off, pay off the card with the next highest balance.

2. The Avalanche Method

The avalanche method consists of paying off the credit card balance with the highest interest rate. This works best when you have a balance you know you can pay off in five years or less. It also works best for people who have the patience to pay off a debt over a long period of time.

Benefits of Paying More Than the Minimum

You Won’t Pay as Much Interest

Regardless of whether you choose the snowball or avalanche method, you’ll pay less in interest the faster you get rid of your debt. The snowball method allows you to pay off small debt sooner, while the avalanche method allows you to pay off your debt with the highest interest rates first.

You’ll Get Out of Credit Card Debt Sooner

You can choose the right method to pay off credit card debt depending on which one makes you feel better. The snowball method fits people who need small victories to motivate them, while the avalanche method works best for people who are more patient.

Your Credit Score Will Improve

Though there are many ways to improve your credit score, paying off credit card debt is one of the best ways to do so. FICO scores are confusing by design. Paying off your debt is one way to ensure you’re on the right path toward improving your credit score.

The importance of paying off credit card debt

It Instills Good Financial Lessons and Habits

Paying off credit card debt requires you to make lifestyle changes that will help you pay for a mortgage. You can even use apps such as Mint to track how you spend your money in order to have a better idea of where your money is going.

Read more: 4 Tips For Using Your Credit Card

It Increases Your Line of Available Credit

Another key benefit of paying off your credit card debt is how much doing so can improve your credit score. Bolstering your credit score will give you more breathing room with your credit cards as you’ll have higher limits.

It Makes Buying a Home (Or Anything) MUCH Easier

Having low credit card debt is important if you’re hoping to buy a home or car in the future. Your mortgage and automotive interest rates will likely be higher if your credit is poor. You may not even qualify to be a homeowner if you have too much credit card debt.

While improving your credit score may sound daunting at first, our team of experts can help to permanently fix your credit in no time. Contact us today!

How To Build Credit Without A Credit Card

how to build credit without a credit card

Your house is in foreclosure… Numerous credit card companies have rejected you because of your poor credit score… You need to build credit fast!

But… You need a credit card for that, right? Not necessarily.

It doesn’t matter why you have bad credit. You just need to learn how to fix it — even if you don’t have a credit card! These seven points will build up your financial self-confidence and show you how to build your credit without a standard credit card!

1. Invest in a Secured Credit Card

A secured credit card is a credit builder’s best friend! It gives you access to a line of credit in exchange for collateral (a small deposit).  which helps mitigate some of your lender’s risk. While paying a deposit may seem a little scary, don’t fret. Most deposits are no more than a couple of hundred dollars.

Secured credit cards tend to come with low monthly fees and some lenders will even give cardholders perks like cash back. Also, since your card is secured by a deposit, defaulting on your balance may not lead to a ding on your credit score. It will, however, result in the loss of your deposit.

The best part about secured credit cards is that you’ll only need to use them for a limited amount of time! As you prove to your lender that you can make timely payments, your credit score will go up. As it does, you’ll find that you qualify for a number of other cards with better terms and no collateral requirements!

2. Get Approved for a Credit-Builder Loan

Want a true credit card alternative to building your credit? A credit-builder loan has you covered!

Several types of credit-builder loans exist.

Pure credit-builder loan: This loan type is a savings account/loan hybrid. Basically, the lender deposits your loan amount into a savings account and freezes that money. You then progressively contribute to the savings account an amount equal to the loan.

Once you’ve paid down the loan, the money unfreezes and is awarded to you.

Proper management of this process can give your credit score a serious boost!

Standard secured loan: With a standard secured loan, you’ll need to show your lender that you have assets equal to the amount you’re looking to borrow. That way, if you default, the lender can repossess your assets and pay themselves back.

Unsecured loan: Unsecured loans are common for medical expenses and other emergencies. These are relatively straightforward in that you apply for an amount of money and, upon approval, walk out with that amount the same day. You will then need to pay back the loan per its pre-determined payment schedule.

Unsecured loans can come with high-interest rates and fees to help lower a lender’s risk.

3. Ask Someone to Cosign for You

A lot of credit products you may not ordinarily qualify for will consider approving you if you can find a cosigner.

A cosigner is a person who has good credit and vouches to take care of your debt if you should default. With a cosigner, you can often enjoy low-interest rates, credit card perks and of course, the ability to build up your credit.

4. Become an Authorized User on Someone Else’s Card

Becoming an authorized user means getting a credit card that’s attached to someone else’s account. Given that the account holder is liable for ensuring balances get paid, banks are very liberal about authorizing additional users despite their credit history.

If credit card companies see that you are responsible with money as an authorized user, they are more likely to issue you your own card in the future.

5. Use Rent-Reporting Agencies

Rent payments are seldom reported to credit bureaus but they can and should be.

Why?

Because timely rent payments help build credit.  

Every instance where a person demonstrates the responsible handling of their rent will work in their favor on a credit report. Also, future landlords will be more likely to rent to applicants with reported histories of prompt housing payments.

6. Build Good Financial Habits

This point might sound obvious but at the end of the day, how you manage your money can have a profound impact on your credit score.

Live within your means. Buy only what you need as inexpensively as you can. Whenever possible, pay upfront. When you do spend money, spend it on things that you really need and that are built to last.

Also, never get caught up loaning money to people who aren’t likely to pay you back. This can not only strain your wallet but can also strain relationships.

7. Enlist the Help of a Credit Repair Agency

Credit repair agencies remove negative items from credit reports.  These items can include repossessions, liens, foreclosures, and late payments.

You may be surprised to learn that many indications of poor credit on credit reports are errors. There are a lot of companies who specialize in finding and removing those errors for a nominal fee.

With an error-free credit report, you’re more likely to strike banks and credit card companies as a promising applicant and be approved for loans!

If you want to learn more and start paving your path towards a promising financial future, contact GoCleanCredit.com or give us a call at 1-866-991-4885 for expert advice.