My significant other and I are planning on getting married and buying a home in about two years. We'll have about $30k saved up by that time - plenty enough for a 20% down payment on a suitable home in our area.

We recently went to check our credit scores and found that mine was much higher than his: 780 vs 680. I have had an excellent credit history with perfect payment for the last ten years on several credit cards, school loans, and a car loan, while the only debt he has had is his car payment, school loan, and two store cards with less than 24 months history (one he got just two months ago).

My questions are:

1) Should he consider getting a credit card to pay monthly bills to up his score? As of now he pays for everything with a debit card issued through the local credit union. If he were to do the same, only with a credit card, my thought is that that would build up his credit history. However, I know that applying for a lot of credit all within a certain window is a bad idea.

2) Should I close my store cards? I have 6 credit cards total - three major cards with high limits and three store cards that I rarely use with very low limits. I figure that closing the store cards won't mess with my available debt / used debt ratio too much, they aren't my oldest cards so it won't affect my payment history score too much, and it will decrease the number of debt lines I have open. Does that even matter?

3) I bought a used car two years ago and will have it payed off within another year. However, it has its share of problems as older cars do, no matter how well I care for it. I would love for it to last me another 3-4 years, but that might not happen. In the event that it completely dies and I have to get a new car (and car loan) right before we apply for a mortgage, how badly will that affect our ability to get a good loan?

4) How does getting married affect us when we go to get a home loan? Do they average our scores, or just use the highest/lowest score? He makes almost double what I do but I have the better score, does this matter?

Thanks for the help.

Honestly the best advice I can give you is to meet with a mortgage specialist and ask them all of these questions. Most of the answers to your questions will change depending on what institution you go through for your mortgage as each institution has its own lending policies and guidelines. These are all great questions that mortgage reps are used to answering.

As far as the credit score advice goes it is VERY hard to say what will be the best for you and your significant other. The best way to use a credit card is to use it and pay if off every month, making sure to never go above 50% of the available credit amount. However, adding another credit card may not improve your significant other's credit score, even if he uses it perfectly. FICO likes to see a variety of different types of credit lines on your credit report.

I hope that helps!

Go to a mortgage broker that deals with Underwriting such as Churchill Mortgage and they won't base anything off of your FICO (I love debt score). They will actually look at things like your debt to income ratio, how much you make, have you been making your rent payments on time, etc..... As for the car, you need to pay it off and save up the cash to buy a 2-3 year old car with lower milaege. These days you can find an awesome car for around 6-8K.

1) Do not close any cards if you are planning on buying a home (JC Penny card ect add to your overall available credit)

2) Limit the hard inquiries: (do not apply for new cards ect)

Your significant others score is not that bad (Yours is amazing: sigh.. i once had a score like that) The best thing he can do is get his credit report
Take care of the errors
Settle any collections
Pay on time and clear those balances (Closing cards is a no no for him too and limit the hard inquiries)

You do not have much to worry about if you are planning on 20% down (both of you are fine)



Their is also another option if you don't want to liquidate your savings: FHA Loan 3-5% down (and you will have to pay PMI +$100 fee a month) but you will have plenty of money for furnishing your new home

I think you are right about him getting the credit card since it is the most useful and effective device to build your credit rating.for the rest, as the rest of the posters said, you must contact an expert.