I would like to start the process of buying my first home...

[BEELZEBOB]

But as a 29 year old manchild, I dont know where to start.

My current credit score is a 698. I would like to build it to at least 720 in the next 6 months while saving up for a wedding and down payment.

My plan to build credit would be to open up an American Express card, and just use it as I do with cash and debit cards, and just pay in full every month. (Is that a sound plan?)

Once I have built up another 20 - 30 points, I was going to try and get pre approved for a $250-$300K fixed loan. Where would be the best place to start?

I am hoping I can get a good 15 or 20 year fixed mortgage.

Can I ask for the kindness of one of you "adults" to kick me in the right direction?

[newracer]

Using a CC and paying off the entire amount each month does not build your credit.

[BEELZEBOB]

This is why I ask.

What would be the most effective way to build my credit up another 20-30 points?

My family is not the most money wise... My lady and I have little experience with finances beyond living costs and basic savings.

[Scogin]

One of the biggest factors for credit score is average length of credit. If you open a new card or two it is going to shorten the average and bring down your credit score.

Another major factor is your percentage of credit utilization. What is the percent of money you owe versus your total credit limit?

Do you have any collection accounts or negatives on your credit report?

I just learned all about this as I was cleaning up my credit score.

[Teufelhund]

One of the biggest factors for credit score is average length of credit. If you open a new card or two it is going to shorten the average and bring down your credit score.

Another major factor is your percentage of credit utilization. What is the percent of money you owe versus your total credit limit?

Do you have any collection accounts or negatives on your credit report?

I just learned all about this as I was cleaning up my credit score.

^This is good advice. Your income vs debt is a factor when you get ready to buy a house. If you have debt, pay it off quickly by starting with the lowest balance and paying minimums on everything else. Once the lowest one is paid off, apply everything extra to the next lowest balance. Repeat until it's all gone. (Thanks, Dave Ramsey)

As stated above, any new credit accounts you open are going to hurt your score. In fact, your score takes a hit every time someone checks your credit. If you keep these accounts open for a long time, with a low balance, and in good standing, your score will eventually go back up, but it takes some time.

FWIW the wife and I have several credit cards and we pay them off every month to keep from paying interest on any of them. This does build credit, but only because we are keeping accounts in good standing for a long period of time. Get something with a rewards program so you're getting something extra out of it (cash back, airline miles).

[BushMasterBoy]

I'd buy something less than $200K. Lots of foreclosures the banks are trying to get off their books. If you are a veteran, it is easy to get a VA backed mortgage. Alot of houses require a 20% down now. I paid $130K for my house in 2006. Brand new house on a acre. Last month a house on the same block, same size and age was listed for $89K. If I lived in the metro area, I'd buy a house west in the mountains, with a little land. Do you bank with a bank or a credit union? Ask them about any foreclosures they have on their books. $150K house with 20% down is $30k.
I'd buy a house where you can easily meet the payment. Being foreclosed upon can wreck your credit. As for building credit rating, make sure any defaulted credit cards and other bills outstanding get paid off.

[jhood001]

I'd buy something less than $200K. Lots of foreclosures the banks are trying to get off their books. If you are a veteran, it is easy to get a VA backed mortgage. Alot of houses require a 20% down now. I paid $130K for my house in 2006. Brand new house on a acre. Last month a house on the same block, same size and age was listed for $89K. If I lived in the metro area, I'd buy a house west in the mountains, with a little land. Do you bank with a bank or a credit union? Ask them about any foreclosures they have on their books. $150K house with 20% down is $30k.
I'd buy a house where you can easily meet the payment. Being foreclosed upon can wreck your credit. As for building credit rating, make sure any defaulted credit cards and other bills outstanding get paid off.

A good point here. While most people out there are taking loans that are difficult to pay for two earners, I would recommend the exact opposite and only take on a mortgage that just one of you would be fine paying for your first home. Shit happens and it happens often. You can always jump up to a better house after a few years. Take your second income and save it for a down payment on your dream home.

[ChunkyMonkey]

A good point here. While most people out there are taking loans that are difficult to pay for two earners, I would recommend the exact opposite and only take on a mortgage that just one of you would be fine paying for your first home. Shit happens and it happens often. You can always jump up to a better house after a few years. Take your second income and save it for a down payment on your dream home.

^ yep. And if you push it even further...if you keep buying at 20% under and assuming at right around the same price, your 5th home should be free and clear.

Furthermore, work with realtor with bank hookup!!! If you think you see the best deal in the open market, you are naive. I don't give up my pre market foreclosure list to just about anyone. In most cases, the ones are in the open market are the left over from the carnage.

[BEELZEBOB]

One of the biggest factors for credit score is average length of credit. If you open a new card or two it is going to shorten the average and bring down your credit score.

Another major factor is your percentage of credit utilization. What is the percent of money you owe versus your total credit limit?

Do you have any collection accounts or negatives on your credit report?

I just learned all about this as I was cleaning up my credit score.

No collections or outstanding negatives. Just went from having absolutley no credit whatsoever 5 years ago, to now.

I think I currently owe just over 50% of my total credit limit. Just did a 50/50 cash vs finance on an engagement ring. I will have that paid off in full by June/July

I'd buy something less than $200K. Lots of foreclosures the banks are trying to get off their books. If you are a veteran, it is easy to get a VA backed mortgage. Alot of houses require a 20% down now. I paid $130K for my house in 2006. Brand new house on a acre. Last month a house on the same block, same size and age was listed for $89K. If I lived in the metro area, I'd buy a house west in the mountains, with a little land. Do you bank with a bank or a credit union? Ask them about any foreclosures they have on their books. $150K house with 20% down is $30k.
I'd buy a house where you can easily meet the payment. Being foreclosed upon can wreck your credit. As for building credit rating, make sure any defaulted credit cards and other bills outstanding get paid off.

I want that 90K house! LOL where do you live? I bank with Chase.

We found a really decent pace in Golden for $190 with a decent amount of land.

[Scogin]

No collections or outstanding negatives. Just went from having absolutley no credit whatsoever 5 years ago, to now.

I think I currently owe just over 50% of my total credit limit. Just did a 50/50 cash vs finance on an engagement ring. I will have that paid off in full by June/July

My understanding is that optimal range is around 7%. They want to see that you are using your credit but are not maxed out. If you are at 50% utilization paying that down to 7% should get you 10 to 20 points easy.