Credit Score Issues

[Katy Fry]

Hi

I am currently looking at purchasing a 50-60k rental property.  My first.  I am looking for a loan for that property but it is a little bit of a "non-conforming" property and I also don't have the 20% down for a conventional.  The house is currently rented with long term renters (4 years) and the rent is currently $585.00 per month.  The house needs a little "makeup" but overall is in nice shape.    Sounds to me like a good deal??  

My problem currently is locating a loan.  Apparently, even though I have excellent payment history on my credit and never defaulted, etc.  There is NOTHING negative on my report BUT because my credit use to credit limit ratio is too high I have a score under 700.  This is a problem with the loan companies.    Am I really supposed to take out another credit card and not use it to fix this?  So that it would raise my credit limit, thereby lowering the ratio?  Seems pretty ridiculous.    Any comments or suggestions would be appreciated.

My plan is to purchase single family homes for rental income.    Just need to get over this issue.

Thank you