FHA question

[busymomof3]

Hi,

I am looking to apply for a FHA loan.  My scores are TU 565 due to recent credit inquiries on a recent auto purchase, and EX 628 which doesn't show the inquiries.  All info on both reports are the same.  I have late payment history in the past but it is beyond 3 years old.  I also don't have any recent credit card or debt.  I do have some old charge offs that are 6 years old and can pay them off if need be.  I am looking to purchase in about 3 months and will have approx 10,000 use as a down.

My question is do you think we will be able to qualify for FHA approval given this history.

[Lel]

That EX (Experian) score that you mentioned - do you mean to say EQ (Equifax)?  True Experian FICO scores are not available for purchase on this or any other site.

Where did you get your TU score from?

To qualify for an FHA loan, you'll need to get your middle score up to 620.

[busymomof3]

Thank you, yes i did mean to say EQ.  I thought about it after I posted but I wasn't sure. 

I think the reason my score is at 565 is due to some credit inquiries for a recent auto purchase and the way they went about it.  They kept giving me the run around with what vehicle they would finance and everytime I questioned a vehicle they reran my credit.  I am wondering if a LO would understand that in a manual underwrite.  

I am also wondering if I get a secured credit card through my credit union if it will incerease my score rather quickly since I don't have any revolving debt.  What would be your opinion.  My scores haven't moved much in the last few years because I haven't had any new credit.  My low scores are due to really old info on there which my understanding is the FHA will take explination of ( and my explination is the economy in michigan has been faltering for about 5 years and I have had a steady income reduction over the last several.  It has finally stabalzed for me so I think I am good to go.)  I was just wondering if a LO can tell me some stratagies and what not to get my score higher in the next couple of months.  I really don't have anything to dispute, I have one thing I can ask for a good will on which is an auto loan that over 6 years had 3 late payments on all of which was during my hour reduction at work.

What is your opinion of a secured CC raising my score withing the next 4 months?

[Anonymous]

secured CC shoul start helping after a coupe months.  Keep in mind that you have to be able to prove open and current tradelines and they need to be opn for 12 months to count on the loan.  You can use things such as utilities (as long as they have been up to date every month for 12 months and are in your name)

You do not want to explain to the UW that your reason for a low score is spiraling unemployment over a long period of time for 2 reaons.  It shows you didn't adjust/react properly to protect your credit, amd since you have not really re-established credit, there has been no financial sability shown since the spiral.  it is OK when they ask you to write letter of explanation for past problems that there was unemployment and lost wages.  You just don't get to explain away your current FICO score with that reason.

Get a CC and just keep it under 9% utilization to give you the best score boost.  Once your midscore is above 620 then start calling the lenders.  Good luck.

[Anonymous]

You need to give more information on your situation. Below is a link that will instruct you as to what information is needed before you get more replies. Your TU is pretty low so there's got to be more derogatory information on your report. Look at it closely. Also, be sure to get all 3 reports. I agree that you will need some revolving accounts to help raise your score but it will not change a whole lot in 4 months. You still need them though. You need at least 620 mid score to even have someone look at your file. 4 months may be a challenge. It is not totally impossible though but the CC's probably need a year to help build your scores. You may also want to post in the "rebuilding your credit" thread. Good luck.

http://ficoforums.myfico.com/fico/board/message?board.id=loans&thread.id=26264