All Forum Posts by: Nicholas B.

Make sure that you're considering cost of credit on your new debt as well. This will vary based on your credit score and the decision you make here. You should speculate a lower interest rate on your new mortgage if you do decide to get your credit score in line first.  

 Can you clarify what you mean by this part? The rest of your post seems spot on, but I'm reading this as you believe that your available credit will be considered at part of your debt to income ratio(ability to pay). If so, this is antiquated methodology and lenders rarely look at "ability to generate debt" anymore and focus only on your income's ability to sustain your monthly payments. 

I just don't want anybody to make the mistake of closing available credit because of the myth that lenders view it as "you may max out your cards and not be able to pay". I've seen (mostly senior citizens) who fell into this trap. Paid off mortgages and a long clean history will not generate a score over 700 if you've closed all but one card and it's maxed out.

I disagree with closing these accounts. Not only will it increase any future utilization you may use, but it will shorten your length of history. Both bad things. The rest of the post is sound advice, though.

Unfortunately, credit scoring is not about your ability to pay off debt, it's about the ability to manage it and that includes creating it.

One of the negatives I see a lot on well aged credit reports is "no recent revolving balances" or "no recent revolving history". I've seen reports with perfect history and paid off mortgages with a 0 score attached because they hadn't touched credit in the last 5 years. You have to use credit, hopefully in a responsible way in order to generate a great score.

@Ricardo S, I think you have a good handle on what to do here. I would get about 1/2 of those cards paid down, which should take you above a 700 score. At that point you should start to get pre-qualified offers with balance transfer promotions. Open a new card and get the rest down to 0%. Get your utilization down to a 20% total of all of your available revolving, then focus on investing. This will pay you in a couple ways - you'll save the interest now and you'll qualify for a better rate on the mortgage. Maintaining a high credit score will save you great amounts of money and open many opportunities throughout the rest of your life. Good luck in your endeavors!

 This is a bit misleading. If you payoff your accounts you still have a credit history. If you never open any accounts and use cash for everything, you may not.

It's rare that lenders don't report to credit bureaus and generally limited to very small credit unions and non-conforming lenders (consumer finance companies). All of your credit cards are likely to report every month to all 3 bureaus and they all report the balance on your statement. If you pay the entire balance while inside of your grace period, you'll avoid finance charges, but this will not LOWER your credit score.

If for some very strange reason you opened an installment loan and immediately paid it, you'll report a new open account with a balance one month and report a closed, paid as agreed account the next month. If you do this repeatedly, you will shorten your length of history, but it's unlikely to dramatically affect your score either way.

I agree with the balance transfer strategy but disagree with waiting and applying for multiple trade lines alongside your mortgage application. Conventional mortgages take time and some lenders will re-pull your score before closing and you'll probably find that your approval is contingent on that 2nd pull. If your score does drop, it may cause them to pull out or bump you into a lower tier. 

@Bill Gulley is probably right about this being a patch job. DIYers often don't realize that roof structures are engineered in a specific way to distribute load. What happens if you change the way that weight is distributed in a way it wasn't intended? BAM! all kids of bad things can happen - including snapped structural members like you're seeing here. Take a look at the connections of the other lumber up there. If you see the joints separating or signs that they're shifting around, it means a bad repair.

If you can get a wider picture, we may be able to determine if that cross brace should be there, if it should be scabbed or removed and if your can fix this yourself or should hire a structural engineer. 

I agree with @Michael Paris and add that sometimes the best price/value may be a product that happens to be on sale. It also depends on if you're doing the work yourself. I know if I was paying an installer, it would be to spray foam. Fiberglass and cellulose are usually about the same price in my area.

If you have access to the attic, you can move blown in out of the way temporarily. If you don't you're probably hanging batts from below anyway.

Batts don't always work well if you have a complicated structure with angles or varying spacing. They're also difficult to install if the roof is a low pitch - and if there's "shiners" (nails poking through the roof), wear a hard hat because you'll probably give yourself a scalp piercing without one. 

Don't forget that with batts, you'll need to install both inside the ceiling joists and lay a 2nd layer on top. Fiberglass insulation absolutely has to go in tight with no gaps, meaning cuts around electrical boxes, wiring, ducting, etc. That's where blown in shines, as it's much easier to fill in everything.

I'll install batts on any angled ceilings (like cathedral or vaulted) and walls because cellulose compresses so much that it eventually leaves a big gap at the top.  If I'm adding a 2nd layer to a very simple ceiling, I may use batts if they're on sale, but otherwise, I'll blow in cellulose myself.

Vapor barriers/retarders are important, both that they are where you need them and that you don't put a 2nd one where you don't need it. You don't want to use a kraft faced batt as a 2nd layer when there's already a vapor barrier installed.

I bought a cheap lift for about $120 delivered from Amazon. I've hung dozens of sheets with it by myself. If you have the strength to lift the sheet onto the lift, the rest is super easy. I've even used it to get stacks of steel roofing up onto the roof. Worth every penny.

 The same can be said of electric. I can see removing gas supplies in bedrooms since they're obsolete, but I wouldn't absorb that expense on a "what if" when it's common practice to use gas for cooking. 

I agree with @Matt Motil. A DBA is a designation given to a business entity, not a way of creating one.

It's going to take time to establish a solid history, just like starting over again as a teenager trying to establish a personal credit profile from scratch. Sign a personal guarantee and get a business card. Use it responsibly and ask for credit limit increases every 6 months. After a couple years, you should be able to get credit in the business's name without the personal guarantee.

Is there a particular reason you want to do this as a business loan? With no prior biz credit and no D&B score, you're likely to qualify based on your personal credit anyway. You don't need a business to qualify for high limit CCs. My Homedepot card (Citi) just got bumped to 30k and Lowe's (Synchrony/GEMB) is pushing 20k - in my personal name. 

Just know that using revolving credit like that will likely damage your credit score as long as you're floating the balance. These types of cards in a business name are also likely to report on your personal credit as long as there's a personal guarantee. That's not to say that you can't find a loan that will not report, it's just my experience that these CCs show up on credit reports (I work in retail finance, so I see thousands of personal credit reports). 

You may be able to take out an unsecured working capital line of credit in a business entity name that will not report to your personal credit report, but in the 10's of thousands with no prior relevant experience is probably a stretch. History is king and self employed or not, you've never taken a business loan, so you're starting from scratch in the eyes of a conventional lender. I believe that's why hard money lenders do so well in this field.