Secured credit cards in rebuilding your credit for qualifying for a Florida home mortgage

Rebuilding your credit with secured credit cards

Secured Credit Cards

Secured Credit Cards to Improve your Credit Scores

Credit cards are a powerful tool to use to boost your credit scores.  Let’s take a case study.  Say John Smith filed bankruptcy January 20, 2011.  His credit score has plummetted to 470 FICO after filing his bankruptcy.  All of his credit cards were part of his bankruptcy and he has not applied for new credit since his bankruptcy.  He also lost his home and was part of the personal bankruptcy he filed.  All of his debts were discharged on July 20,2011.  His goal to is qualify for a Florida home mortgage.

Re-establishing your credit with secured credit cards

Fast forward to today, February 26, 2013 and his credit score are now 550 FICO.  The reason his scores are better now than it was after filing Chapter 7 bankruptcy is because a consumer’s credit scores increases with time.  As time goes by, even though the consumer does not get new credit, the credit scores improves and the previous bad credit begin not to have impact on their credit scores.  The more the bad credit item ages, the better the credit score.

Improving your credit scores with secured credit cards

Now John Smith has rebuilt his life.  He has a great job making $80,000.00 per year with great benefits and has over $15,000.00 in savings.  He needs to purchase a car and has enough money to pay it in cash and wants to someday purchase a home and needs to qualify for a Florida home mortgage.  He knows that he will probably have problems financing due to his poor credit history and low credit scores.

Secured Credit Cards is most powerful tool to rebuild your credit

John Smith now needs to start rebuilding his credit and improve his credit scores.  The best and fastest way to boost your credit score is through secured credit cards.  The key number of credit cards you should have is 3.  John Smith should get 3 secured credit cards with $500.00 limits.  You should leave a balance of about $10.00 every month on your credit card.  Each secured credit card will boost John’s credit score by 30 points.  If he has 3 $500.00 credit limit secured credit cards and leaves a $10.00 balance on each of the 3 credit cards, John Smith can easily boost his credit scores by 100 plus points if not more.

3 secured credit cards is the ideal amount

With a current credit score of 550, John Smith can easily have a 650 or higher FICO score within a few months with just his credit card payment history.  He can now qualify for a home and auto loan.  Even though John Smith can purchase his automobile with cash, he should finance part of it so he has an auto loan in his credit report and can develop a automobile credit history on his credit report.  Even though it costs him extra interest expense, it is well worth it since the auto loan credit history will probably boost his credit score by another 30 points or so.  His 650 credit score will now jump to 680 FICO. John can now qualify for an unsecured credit card, a department store credit cards, and/or a gasoline credit card.  He will also qualify for a Florida home mortgage loan as a premium credit home loan borrower.

Gustan Cho NMLS ID 873293

 

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Comments are closed.