What to do...

[prosario69]

Hi everyone,

I am 22 months post ch 7 bk.  I have done the following I have 2 platinum CO cards, 1 with a 1100 limit and one with a 2500 imit, I also have a cred 1 card with a 700 limit.  I had a mishap at work and was out for over a month and ran my cards up to the limits.  I am currently working to pay down the balances and should be under 30% by 12/2.  I am interested in purchasing a home early next year and would like to know what else I can do to bring my scores within range to qualify for a mortgage.  I also have a auto loan at 7%, none of these accounts have been late, but my scores are still in the low 600s.

Help!! 

[Scupra]

Pay all but one card off and make sure you aren't late. On the one card that isn't paid off make sure it reports a balance between 1-9%

[StartingOver10]

Scupra is right, the utilization is part of what is hurting your score. It makes up about 30% of the scores formula.

Pull your mortgage scores from here before you apply so you know where you stand. The lender will use the lowest mid score of all applicants on your mortgage (in other words if you and your spouse apply, then the lowest mid score between the two of you). You can get your FICO mortgage scores in the 3 B reports here.  Mortgage lenders do not use FICO 8 scores. Your mortgage scores could be higher or lower.

[prosario69]

My mortgage scores are: EQ: 600, EX: 605 amd TU: 628.  

My plan is to pay off the cards by Dec and then begin to pay on my student loan debt.  Should I apply for any more cards once I have gardened for a few months or do I have enough credit?  I have 2 Cap 1 platinum cards, 1 credit one bank card, auto loan, and student loans.  I see most folks on here with like 10, 15 cards and keep thinking maybe I need more.  

[Taoron]

From what I was told, you also have to have 30% down payment to qualify for a mortgage that soon after a bankruptcy too.  I don't know if I was misinformed or not, but apparently they have gotten a lot more stringent on loans in the past few years.

[Anonymous]

You do not need 30% down, who told you that?

You need 2 years post chapter 7 with a minimum 620 credit score to quality for an fha loan with a modest down payment.

[Scupra]

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@prosario69 wrote:

My mortgage scores are: EQ: 600, EX: 605 amd TU: 628.  

My plan is to pay off the cards by Dec and then begin to pay on my student loan debt.  Should I apply for any more cards once I have gardened for a few months or do I have enough credit?  I have 2 Cap 1 platinum cards, 1 credit one bank card, auto loan, and student loans.  I see most folks on here with like 10, 15 cards and keep thinking maybe I need more.  

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You have enough credit for now. New TL's are going to bring your AAoA down and could also pull your score down. Work on paying off all but one card, leaving one to report a balance between 1-9%. This will optimize your FICO score and let you know where you stand. Most FHA lenders will require a score of 620 to be approved.

A lot of us have more cards like you stated, but a lot of us aren't planning on a mortgage app either Good luck!

[StartingOver10]

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@Anonymous wrote:
You do not need 30% down, who told you that?

You need 2 years post chapter 7 with a minimum 620 credit score to quality for an fha loan with a modest down payment.

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^^^Agree with HannaHoo. In fact, I was thinking the exact same thing: who in the world told you that???

If you decide you want to go conventional financing rather than FHA, then you will need 4 years post discharge, but FHA will definitely go 2 years. The mid-score is lender specific, some want 620 others are looking for 640 or even 660. So make sure you ask the loan officer what the criteria is before you apply.

[Anonymous]

As a previously licensed mortgage banker I cant stress this more than anything.... You can not have any derogs after BK.... It will make your mortgage application go sideways real quick.... Ive had many applications turned down for a 30 day late on a cc or car payment after a bk. Underwriters do not like it.