How can I improve my credit score

HazYuHazYu Registered User new member
edited September 2015 in Help / Advice Forum
My credit score lies at a poor 400 and I need to get a mortgage desperately. I know it is not good for me to get a mortgage at this juncture but it is an emergency. I have talked to the mortgage agents at The Financial Forum at Toronto and they are ready to give me the mortgage but since my credit score is poor the rate is a little high. They have agreed to reduce the rates if I come back with a better score. Is there any possible way by which I can improve my credit score fast?

HazYu on

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  • EncEnc A Fool with Compassion The Land of Flowers (and Dragons)Registered User regular
    edited September 2015
    Short answer: No.

    Longer answer: Your credit score reflects sound financial decisonmaking (in theory) and generally takes a good bit of time to develop. Having a credit card or line of credit you pay the balance off monthly, car payments you (likewise) pay off regularly without delay or fine, and other forms of showing you are a responsible and timely person to loan to are the only ways to update your credit score. In general, you typically are looking at something that will take 2-4 years to repair properly, and that means paying off all outstanding debts, student loans, or other items that may be negatively impacting your score.

    There is no situation where you need a mortgage "desperately." If you have a credit score of 400 and don't have 30-50% cash on hand to put down against the mortgage you probably aren't going to be able to absorb the upkeep costs of owning a property (which are very considerable even for new properties).

    What situation could possibly be an "emergency" mortgage? Especially in Toronto where housing prices are bonkers.

    Enc on
    zepherinDarkewolfeShadowhopeQuidNightDragonJuliusLostNinjaSilverWind
  • zepherinzepherin Registered User regular
    Look HazYu, legally you are stuck. The credit repair agencies generally can't help to increase your credit in the short term, without engaging in a fraudulent practice.

    And what is an emergency situation for a mortgage? I can see an emergency situation where you need a rental.

  • Lindsay LohanLindsay Lohan Registered User regular
    While I'm not sure if it works any differently in Canada than the US - do you have any sense of what it is that is causing the low score? 400 is really low by the standards over here.

    We've been repairing ours over the past few years and I can say the quickest fixes for us came from getting bad stuff off our credit score like old bills that went to collections (sometimes saw an increase within 1 - 2 months) and paying existing credit cards down to have a larger percentage of our credit available.

    I agree though - emergency mortgage seems odd. We had to rent an apartment for years because we had messed up our credit so bad.

  • Dr_KeenbeanDr_Keenbean Dumb as a butt Planet Express ShipRegistered User regular
    As someone who has managed to get his credit score from -400 to 750+ I can say that there is no way to do it quickly. It has taken me about 7 years of making 0 mistakes.

    The big upswing for me came when I bought a new car in 2012. I knew my credit was garbage and the interest rate would be atrocious (and it was) but I chose to eat it for a while to improve my credit and it worked extremely well. I have since been able to refinance my loan for a much lower rate since my credit has improved dramatically.

    I don't know anything about mortgages since I may well be a renter for life, is it possible to do something similar?

    PSN: Dr_Keenbean LIVE: Dr Keenbean Battle.net Drkeenbean#1951
  • bowenbowen How you doin'? Registered User regular
    The best way to improve credit is to use credit and pay it off on time.

    Examples: New Vehicle loan, make every payment on time. Credit card, never miss a payment and never exceed 40% utilization if you can't make a payment. Student loan debt, make it on time.

    Once you 'complete' a loan, your score will dip (you no longer have the available credit), but it will increase faster after the fact (you have a 'you're not a deadbeat' account on record as completed). Good debt like car loans and mortgages and student loan obviously help more.

    At this point, OP, I'd advise against getting a mortgage. I'm surprised in Canada you'd even be considered, I have a hard time with my 650+ score.

    You should consider getting secured credit cards or loans (car, personal loan) to help you recover quickly.

    And you should get all the black marks off by settling old debts that haven't fallen off the report. So if you didn't pay a certain bill, fix it.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
    EncDr_KeenbeanAngelHedgie
  • DarkewolfeDarkewolfe Registered User regular
    "Emergency mortgage" is usually abbreviated as "renting." Like, if your credit score is 400 you're probably likely to default on any mortgage, so the lenders are rightfully dubious and charge premiums due to the risk of loaning you money.

    What is this I don't even.
    EncbowenQuidzepherin
  • QuidQuid I don't... what... hnnng Registered User regular
    What in the world is an emergency mortgage?

  • bowenbowen How you doin'? Registered User regular
    I think it's "I haven't been able to find a good apartments and I don't want to be homeless" sort of situation.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
    zepherinGaslightNightDragonBouwsT
  • GaslightGaslight Registered User regular
    edited September 2015
    It seems like making potentially decades-long commitments on an "emergency" basis is just not advisable, as a general rule.

    Gaslight on
    bowen wrote: »
    The bacteria in your poop exist everywhere.
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  • GinGin Registered User regular
    You have no chance at getting a decent credit score for at least a few years. Start making other plans.

  • MichaelLCMichaelLC In what furnace was thy brain? ChicagoRegistered User regular
    Any broker who is suggesting you increase your score quickly is shady and should be avoided.

    Echo wrote: »
    Something working on the first try is a source of great suspicion.
    GaslightEncShadowhopedispatch.oSmrtnik
  • Fuzzy Cumulonimbus CloudFuzzy Cumulonimbus Cloud Registered User regular
    You do not need to be getting an emergency loan with a 400 credit score. It will ruin your life.

    no no no no noo no no no no no
    Shadowhopedispatch.o
  • dispatch.odispatch.o Registered User regular
    edited October 2015
    If you are for some reason attempting to "save" a family members home by purchasing it through or from them, which is one of the only situations I could see this really being an emergency then I would really advise you to rethink this or explore other options.

    The reason you have a credit score of 400 is that you haven't shown you're capable of making financial decisions with the reliability a lender would like to see. This could be because you have an error in your credit report, it could be that you have insufficient credit history or it could be because you're bad with paying bills reliably. You can certainly try to fix any errors, but that wont really just add a few hundred points to your credit score over night.

    Edit: To be honest, I'm a little surprised that you were offered a mortgage at all. I'm a bit frightened to ask, but what are the terms?

    dispatch.o on
  • Fuzzy Cumulonimbus CloudFuzzy Cumulonimbus Cloud Registered User regular
    dispatch.o wrote: »
    If you are for some reason attempting to "save" a family members home by purchasing it through or from them, which is one of the only situations I could see this really being an emergency then I would really advise you to rethink this or explore other options.

    The reason you have a credit score of 400 is that you haven't shown you're capable of making financial decisions with the reliability a lender would like to see. This could be because you have an error in your credit report, it could be that you have insufficient credit history or it could be because you're bad with paying bills reliably. You can certainly try to fix any errors, but that wont really just add a few hundred points to your credit score over night.

    Edit: To be honest, I'm a little surprised that you were offered a mortgage at all. I'm a frightened to ask, but what are the terms?
    Seriously! The offer will probably wreck your life. It has to be insane.

    no no no no noo no no no no no
  • GinGin Registered User regular
    Not only are the terms almost certainly shitty, but do not think you can't have the property taken away from you if you can't keep up on the payments, which a credit score of 400 implies.

    Every once in a while we purchase a foreclosed property at auction that is still occupied by the previous tenants who could not keep up with payments. These people often have such shitty credit scores we can't offer them any sort of rental agreement to stay in the home, so it's either GTFO or get arrested and have your shit thrown in the yard.

  • zepherinzepherin Registered User regular
    edited October 2015
    Gin wrote: »
    Not only are the terms almost certainly shitty, but do not think you can't have the property taken away from you if you can't keep up on the payments, which a credit score of 400 implies.

    Every once in a while we purchase a foreclosed property at auction that is still occupied by the previous tenants who could not keep up with payments. These people often have such shitty credit scores we can't offer them any sort of rental agreement to stay in the home, so it's either GTFO or get arrested and have your shit thrown in the yard.
    It's kind of a bad deal all around because when they leave, they often trash the place too. I used to do foreclosure inspections and the former owners used to leave to places annihilated.

    zepherin on
  • GinGin Registered User regular
    zepherin wrote: »
    Gin wrote: »
    Not only are the terms almost certainly shitty, but do not think you can't have the property taken away from you if you can't keep up on the payments, which a credit score of 400 implies.

    Every once in a while we purchase a foreclosed property at auction that is still occupied by the previous tenants who could not keep up with payments. These people often have such shitty credit scores we can't offer them any sort of rental agreement to stay in the home, so it's either GTFO or get arrested and have your shit thrown in the yard.
    It's kind of a bad deal all around because when they leave, they often trash the place too. I used to do foreclosure inspections and the former owners used to leave to places annihilated.

    Sometimes it's a good idea to offer a cash incentive for vacating peacefully, usually cheaper than having to do a bunch of rehab.

  • ceresceres When the last moon is cast over the last star of morning And the future has past without even a last desperate warningRegistered User, Moderator mod
    The topic is credit score, so please talk about that.

    And it seems like all is dying, and would leave the world to mourn
    MumboJumbo
  • JasconiusJasconius sword criminal mad onlineRegistered User regular
    the only short term thing you can do is pay off credit card debt if you have it, and even that would take a month to kick in probably

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