Boost Mortgage Score By 60 Points Quickly

[Anonymous]

I was able to receive preapproval for a mortgage even though my scores aren't the best right now 535 being my middle score. I've found a house and my lender has told me that if I don't get my score above a 580 I'll have to put 10% down. Because I was in a really bad situation, my parents have agreed to pay the 10% down for me so that's not really an issue but we'd like to get over a 580 and only have to pay 3.5% down. I have no collections and my cc utilization is 4%. I had to sell my previous house that I owned for 9 years and was never late. That just came off my report a couple of days ago. My problem is I have 2 closed credit cards - Walmart and Kohls that I was recently late on. I was late on the Kohls in March (120 days) and Walmart reported 180 days late in May. This is all due to the bad situation I was in. I tried writing goodwill letters and was denied. I know nothing but time will be able to heal those wounds but is there anything else I can do to try to get my mortgage score up 50 points in the next 2 months?

[Anonymous]

When did you sell your house?  Also, are the closed cards paid off?  Is there anything else that shows up on your credit, good or bad?

Did you ask your lender if they allow your parents to pay the 10%?  

[Anonymous]

I sold my house June 9th and it just updated on my report today as paid and closed. The closed cards are paid in full. The only other bad thing on my credit is a charged off student loan for 26k. My lender told me to sit tight on that for now and yes they are allowing my parents to gift me the down payment.

[Anonymous]

Your home loan will stay on your credit for 7 years then.  Just because it's closed, doesn't mean it doesn't affect your score, so it's still helping you.  Sounds like the Student Loan is what's really holding you back.  Did your lender say why they wanted you to ignore that?  How old is it?  I thought student loans don't fall off due to age.  (could be wrong on this....)

Also, do you have any open credit cards on your report?  If so, what are the balances and limits?

[Anonymous]

I can't pay the full amount of the charged off student loan and the only option Navient is giving me is to make payments on it. Even if I start paying on it, it will remain on my credit as a charge off until paid in full..they won't take it out of default so whether I pay it or not the impact on my credit is the same (unless I can pay it in full). He said underwriting may say I have to pay it but we'll wait for them to tell me.

I have 5 open credit cards. The limits are $200, $250, $500, $700, and $750. The balance on all are 0 except for the $700 limit card has a balance of $19

[Anonymous]

Have you looked into rehab'ing the student loan?  I'm no expert, but seems to be the common way to deal with defaulted student loans.  It essentially brings the account back into good standing.  Takes time, but will be much better for your credit in the long run.  I'd be surprised if UW doesn't require you to do something with that loan, but I'm not an expert on that.  

[Anonymous]

Unfortunately it's a private loan so my only option is to pay it so it shows paid in full. If I do the payment plan they offered they'll still leave it on my credit as default/charged off until the balance is paid in full which will take a few years

[Anonymous]

Every lender is different but mine wanted a year since last late payment if I was under 620. I ended up raising my score to 675 and could proceed even though it was 11 months since last late, 

[Anonymous]

What did you do to increase your score?

[Anonymous]

I think the only thing you can do at this point to raise your score is handling the charges off student loan. Because it's a federal loan it is updating monthly and I can guarantee that you have SEVERAL notifications of 90+ day late payments. There's also a good chance that you may have gone into the 120-150 day late marker.

Even though your loan officer is suggesting to hold off, you could consider consolidation to avoid default if that hasn't happened yet. The lates won't go away but it will stop updating as a negative account monthly.

You are doing what you need in regards to your credit cards. It sounds like it's the student loans that's holding you back.