Captain Credit

This is a 24-Month Guide to Establish Yourself Financially to Qualify for a Standard Home Loan

What do I do?!

Month 1 — Do This First!

You need these accounts to be 24 months old to qualify for a wider range of mortgage products:

• Open a Bank Account:

  This is often the first step in establishing financial independence and a great way to start managing your own money.

• Apply for a Secured Credit Card:

  A secured credit card is backed by a cash deposit you make upfront. The deposit amount is usually the same as your credit limit. Easier to get approved when starting to build credit.

• Become an Authorized User:

  Captain Credit and The Iron Banker DO NOT generally recommend this, but it’s an option for some. If a parent or family member is willing, they can add you as an authorized user on their credit card account. You’ll benefit from their credit history, but risk negative impact if they miss payments. As a rule of life it is better to set yourself up to not to rely on anyone else.

  Relying on yourself, that's what financial independence means.

Months 2–12

• Open a Savings Account:

  Specifically a savings account, not checking. Deposit a small amount you can afford to leave untouched. This money needs to become SEASONED to qualify for mortgage lenders.

• Pay Your Bills On Time:

  Timely payments, whether utility or credit card bills, are a major factor in your credit score.

• Apply for an Unsecured Credit Card:

  After 6 months of good payment history, apply for an unsecured credit card. You will need 2 revolving credit accounts with 24 months of seasoning. If not approved now, try again around month 11.

• Keep Credit Utilization Low:

  Use only a small portion of your available credit, ideally under 30%.

• Don’t Apply for Too Much Credit:

  Each credit inquiry can lower your score. Avoid multiple applications in a short time.

• Check Your Credit Reports Regularly:

  Review your credit reports to understand your credit standing and spot any errors.

Months 13–24

• Continue to Pay Bills On Time:

  Consistency is key to a strong credit profile.

• Keep Credit Utilization Low:

  Maintain under 30% usage across your credit accounts.

• Do Not Apply for Any New Credit:

  Avoid inquiries in the 6–12 months before applying for a mortgage. Do not open store cards or gas cards.

Month 24!

Contact a real estate professional and begin the home-buying process. First, have a mortgage lender pull a tri-merge credit report for you.

Remember

Building credit is a marathon, not a sprint. You are only competing with yourself. Make smart financial decisions and stay focused on your goals.