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Bluebeer69

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Pay down credit balances or save for down payment on house?
Our credit score average is 640 across 3 bureau's. Our credit card utilization is 67%. We have down payment saved for 3.5% down. Some are saying pay down credit cards and increase your score to over 700 and we could qualify for 1% down. Others are saying you are going to pay more % on loan because score is not high enough. Any suggestions?

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Pay your credit cards and get your utilization to no more than 10%.  Until you do, you are not ready for a mortgage.  Read the articles here so you can learn about credit. 

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I concur that thhe credit card utilization should be your concern.  Compare the interest you are currently paying, 20% or more is substantially more then 3.5% on the same amount.   Consider the savings of 1% of 200,000$  over 30 years.

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Disagree

I disagree that it means they aren't ready for a home loan.  It really depends on what the balances are in relation to how much they make.  It is possible that they have a 67o balance on a card with a credit limit of 1000.  The first thing I would do is see if you can get the limits on cards raised.  Do this without having your credit pulled.  Most credit card companies have an easy, score-pull-free, option to do this.  Do not call them and ask as it is likely they will pull your credit.  Check their website....it is usually under a "services" or "offers" tab.  That is an easy way to get the utilization down without spending anything.  If you make decent money and aren't late on payments, you stand a good chance of doing this.  If you are using credit cards to live off of, then I agree with what was said before, you aren't ready.

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