FHA Mortgage...Am I almost close to the magic number?

[Anonymous]

Hi all,

I desperately am trying to qualify for a loan. I have bad credit though but have been slowly trying to repair it. Today I pulled my 3b report from myfico and these were my scores for Mortgage FICO 5, 4 & 2 Equifax 564, Transunion 571 and Experian 587. I have read the FHA needs a minimum of 580 for the 3.5 percente down and uses the middle number which would be 571 for me. Does this mean I might be close to qualifying for a mortgage as far as scores go? Thank you in advance. 

[Anonymous]

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@Anonymous wrote:

Hi all,

I desperately am trying to qualify for a loan. I have bad credit though but have been slowly trying to repair it. Today I pulled my 3b report from myfico and these were my scores for Mortgage FICO 5, 4 & 2 Equifax 564, Transunion 571 and Experian 587. I have read the FHA needs a minimum of 580 for the 3.5 percente down and uses the middle number which would be 571 for me. Does this mean I might be close to qualifying for a mortgage as far as scores go? Thank you in advance. 

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First of all, going into a mortgage with desperation may be a dangerous proposition -- are you sure you can handle the many financial responsibilities of home ownership?  Sometimes waiting a year or two can have a huge effect on your financial sanity and stress!  

Secondly, you can raise those scores probably significantly -- but it depends on what is bringing them down.

Please list:

• How many collections you have and how much is owed
• How many chargeoffs you have and how much is owed
• Any public records (BK, liens, etc)
• Each and every credit card account you have along with credit limit and amount owed
• Each and every loan you have open along with initial balance and amount left to pay
• How much is the home and what is your annual income?

Then we can help better!

I raised my scores from 550s to as high as 730 in 6 months, but it took a TON of work and diligence.

[Anonymous]

First of all thank you so much for replying! Okay so I would really love to get in a house within a year from now, well that's my dream lol. However I know that I totally messed up my credit and just now have started to try and rebuild. This is my info to give you an idea of what I'm dealing with. It's bad I know

• $48800 base annual income brought in 53K last year
• Zero public records, BK, liens, etc.
• Credit CardsCapital One Platinum $500 CL $309 balance 1 year 3mths old (no lates)Credit one $450 CL $227 balance 10 mths old (no lates)Victoria Secret $250 CL $121 balance 5 mths old (no lates)
• Ulta $150 CL Zero balance 5mths old (no lates)
• Kohl’s $300 CL Zero Balance 5mths old (no lates)
• Capital One Quicksilver $500 CL $38 balance 6mths old (no lates)
• Bank of America $500 CL $78 balance 3mths old (no lates)
• Authorized user on my husbands CC’s but they aren’t showing on my 3B reportAmex $1000 just rcvd (hubby is very very new to credit)
• Capital one $1000 CL $245 balance 5mths old(no lates)
• Auto Loan $34,152 6mths old(no late payments) starting balance 34,903
• collectionsenhanced recovery $652 (2013)speedy cash $728 (2012)
• medical $358 (2013)
• medical $83 (2012)
• Charge offs

Conns credit $2,140 (2014)

Crest Financial $1343 (2015)

First NTl Bank $612 (2013)

First premier $560 (2011)

Loan $148 (2013)

Loan $700 (2013)

[Anonymous]

Mortgage scores take credit card usage seriously. Besides that, your oldest credit card is almost 1.5 years old, so your Average Age of Accounts is being affected, but there's nothing you can do about that but let the accounts age. 

Credit Card Usage - the best mortgage scoring comes when you have all balances at $0 except one. The one you leave a balance on, should have less than 9% of the balance reported. 

Capital One Platinum - $500; $309 balance - you're currently at 61% utilization 

Credit One - $450CL; $227 balance - you're at 50% utilization 

Victoria Secret - $250CL; $121 balance - you're at 48% utilization

Ulta - good leave this alone

Kohl's - good leave this alone

Capital One Quicksilver - you're at 7% utilization on this - good

Bank of America - good leave this alone

Capital One - $1000CL; $245 balance - you're at 25% utilization

Auto Loan - fine - keep paying on time

With your collections and charge-offs, it seems you have quite a few old ones that will age off within the next two years. Are they still reporting every month? If so, it's hurting your scores. Leave the medical collections alone. If you end up going FHA, they will be ignored because the balance is low. 

On the First Premier collection - I would call the credit bureaus and ask for an early exclusion to get it removed. 

For the rest of the collections, if they are reporting every month, the only way to get them to stop reporting is to pay or offer some type of settlement so the account can be closed. 

[Anonymous]

thank you for responding Okay so I really just need to start paying all of this off right?

All of the collections and charge offs are still reporting except for:

Crest Fianncial $1,343 hasn't reported since 8/2015

loan $148 hasn't reported since 07/2017

[Anonymous]

Yes, if I were you, I would start paying off the credit cards at least. I would leave the card alone with the 7% balance and not pay that off. Keep paying the monthly bill of course. But I would pay all the others down to $0 if you had the money. You may not see a huge increase in scores because of the charge-offs and collections, but either way, you should do it.  I'm not a lender, but I think most people in these forums have found it hard to get approval with open and reporting charge-offs and collections. I would get advice from the lenders on here and see what they say in regards to that. 

[Anonymous]

Okay thank you!