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FHA approval odd for a recovering credit abuser

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eeflores3
Valued Member

FHA approval odd for a recovering credit abuser

Hi -

 

For the past 5 months, i've been working on my credit by mostly paying off old  mistakes. I've seen improvement in my scores so today I checked my Fico 8 mortgage score and they are listed as:

 

Equifax - 586

Transunion - 582

Experian 594

 

I am aiming for FHA loan sometime next year but I have 3 baddies left:

 

1) First Premier - $403 I will pay this off next week

2) Conn's - $3595 hoping to settle with them by end of August

3) Mainstreet - $7500 for a lemon I let go. This one is the one that worries me. I do not know how to handle this huge baddie. 

 

My goal is to continue repairing my credit and purchasing a home by next year. I read somewhere all I needed was a 580 score to move forward but will the derogs block me from being a homeowner?

 

All advice is GREATLY appreciated. 

 

April 2017 - Transunion: 548; Equifax: 552; Experian: 541
June 2017 - Transunion: 574; Equifax: 576; Experian: 582
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4 REPLIES 4
StartingOver10
Moderator Emerita

Re: FHA approval odd for a recovering credit abuser

Depends on the actual derog.  From your post you have two that are larger than $2k which would impact your DTI by 5% of the balance of the outstanding debt if they aren't settled before you make application for a mortgage.

 

The very good thing is this:  you already know about it so you can do something about it before you ever make application.

It is far better to negotiate before you ever make application because once that mortgage inquiry (from a lender) shows up - the CA's become much less cooperative.

 

Is the Mainstreet one a judgment?  Check your public records to know for sure. It may not be on your credit report as a judgment, but that doesn't mean it isn't one. 

Check the rebuilding section to see how others may have handled Mainstreet in the past. 

Message 2 of 5
eeflores3
Valued Member

Re: FHA approval odd for a recovering credit abuser


@StartingOver10 wrote:

Depends on the actual derog.  From your post you have two that are larger than $2k which would impact your DTI by 5% of the balance of the outstanding debt if they aren't settled before you make application for a mortgage.

 

The very good thing is this:  you already know about it so you can do something about it before you ever make application.

It is far better to negotiate before you ever make application because once that mortgage inquiry (from a lender) shows up - the CA's become much less cooperative.

 

Is the Mainstreet one a judgment?  Check your public records to know for sure. It may not be on your credit report as a judgment, but that doesn't mean it isn't one. 

Check the rebuilding section to see how others may have handled Mainstreet in the past. 


Yes, I called one agency this week to settle the 3500 debt but ended up in a screaming match with manager. 

 

I checked and nothing on public records for Maintstreet. How else would i know if it were a judgement? 

April 2017 - Transunion: 548; Equifax: 552; Experian: 541
June 2017 - Transunion: 574; Equifax: 576; Experian: 582
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Message 3 of 5
StartingOver10
Moderator Emerita

Re: FHA approval odd for a recovering credit abuser

You checked the right place for a judgment. The only other thing I can think of is check the public records of the county where you lived at the time of the default. If it was in a different location (different county or even different state) its possible they obtained the judgment there. Its possible they didn't bother to get one which would be good news. 

Message 4 of 5
Anonymous
Not applicable

Re: FHA approval odd for a recovering credit abuser

When did the Conn's and Mainstreet become collections? I'm assuming the Mainstreet may be a charge-off now since it's an auto loan, is that correct?

 

Regarding the 580 score, that will depend on your lender. Even with FHA's minimum requirement of 580, there are lenders out here that will require a higher score to get approval with them. The good news is you are at least at that 580 threshold already, and now it's just time to get higher. 

 

It may be worth going over to the Rebuilding Your Credit section to see if anyone over there has dealt with Conn's or Mainstreet before. 

Message 5 of 5
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