I'm 25, have almost $50,000 worth of debt. What can I do to clean up my credit so I can buy a house?

I have good credit, never made a late payment and always make atleast my minimum payments, and then some. I recently consolidated some credit card debt and some of my fiance's debt with a $30,000 private loan which we pay together. Then I have about $20,000 worth of debt in consolidated student loans, car loan and some store credit cards from home related items (tv, furniture, etc.)purchased with 0% or low financing. All of my debt and most of my fiance's is in my name because his credit was too bad to get any loans, etc. So even though it's all in my name, we have no problem making payments each month since there are 2 of us paying. But as we work on getting his credit in line for him to one day be a co-signer for a house, what can we do to get my credit up seeings how I have so much of my credit tied up for the both of us? I've already closed any zero balance credit cards I had open but what more can I do??? Thanks for any tips anyone may have :)

OK, so as far as a debt/income ratio... not sure if this is how you figure it out but if you take my monthly income and deduct my minimum monthly payments, I have about $1,000.00 left over. (Keeping in mind my fiance pays about 30% of my debt monthly as well, but I know banks don't take that into consideration in this case) Once he has enough credit for us to co-apply, our combined yearly salary is over $80,000 a year and currently our debts together are about $70,000 total....if this info helps at all.... and thanks for all your helpful comments!

What you have to look at is your Debt to Income Ratio, without that its too hard to give you an answer.

Well it seems you are managing the debt thebest you can. And thats the most important thing. Even though you are up to your eyeballs in debt, you have manged to not default so your credit score is doing ok.

When it comes to getting a house you will have to try to find a bank that does not stress debt to income rate as much. Some banks allow up to 50 % or even more as a debt to income ratio. And i would assume that with 50k you would certainly be up in that range.

Sit down with a mortgage broker. As long as your credit score is over 600 and your income is sufficent to cover the mortgage payments, your broker will find a bank that will work with you.

You most likely will need to have at least 10% down as well.

If you have good credit, and just have lots of debt, all you need to do is come up with 20% down on the house you want to buy. They will give you the mortgage no questions asked. As long as you keep paying everything on time, and there are no problems with anything, your credit rating is excellent. The 20% down is the magic number. If you want to get a mortgage with anything LESS than 20% down they take a look at your debt to income ratio. But with 20% down, they ignore that.

If you have MORE than 20% that you can put down, you can than easily request they not only give you the mortgage, BUT also take all of the debts your have and are currently paying off and ADD that amount to your mortgage, and pay off all of your other debts at the same time. So in the end, you are ONLY paying your mortgage.

Banks LOVE people with money. It's when you DONT have money that they run from you.

keep do what your doing, paying your bills on time and stop using your credit cards till u are out of debt.. As for your bf it will take time for him to see any change.. Make sure he pays off all his debt and u guys should be fine..

Rachel,
Getting a mortgage is the last thing I would be trying to do at this point in time. Piling on more debt would not be wise.

It woudl make more sense to wait to get a better handle on your debt load first.

I recommend you pay down AT LEAST half of total debts first before trying to get a mortgage. This will also give your BF a bit more time to get his score up.

You are currently in alot of debt, you quoted $80,000 "combined"income. I would imgaine that's pre-tax income.
Furthermore...if things don't work out with your BF, that would mean ALOT less income you have available to use to pay $70,000 in debt PLUS a mortgage. (this happens everyday).

I don't know you or your BF, but I am trying to tell you what I think is in your best interest, since you are the one that posted the question and not him.
SUMMARY:
Pay down Most of debts First, then create a small savings of several thousand for emergencies, then in a year or two, start looking for a mortgage.
Good luck.

You should've never closed your zero balance credit cards. That's a mistake. Those can help you tremendously with your credit especially when you apply for a loan later. ALWAYS ALWAYS keep your account open especially your ones with good standings. Close your accounts will only hurt your credit. Now, the good thing is you have been paying all these payments on time. Therefore, it's ok to have $50,000 in debt. In an ideal situation, it would be better if you don't have this debt. But when you buy a home, perhaps the bank may include this $50,000 debt in the loan. So all you have to do is to pay your mortgage. But nothing else. You don't have to clean up your credit. Having debt is not necessarily a bad thing but not paying them on time is bad. So, you are in a better situation than you think you are.

And don't do anything such as debt consolidation or debt settlement. Then you will have a hard time getting a loan later to buy a home as both of these courses of action will hurt your credit.