How would 2 different credit scores affect loan eligibility?

[Anonymous]

Hi there!  My wife and I were planning to purchase a house in the end of 2010 so I am starting my research into the process.

THe first glaring question that I need answered is how do lenders calculate the ability of a married couple to get a loan?  My credit score is abyssmal (550 but slowly rising) due to some stupid mistakes made 3 years ago.  My wifes credit is very good at 750.  We are going to use this year to pay off all of my old debts in preperation for the house purchase.

Lets just assume, worst case scenario, that all my old debts are paid but my credit score does not rise.  How would a bank look at a my wifes 750 and my 550 fico scores?  Would it average out?  I make the largest portion of our income so would it be more heavily weighted on my score?

[Anonymous]

They take the lowest middle score of all borrowers.  So if you wife is 750 760 and 770 and you are 550 560 and 570, they will use your 560.

The only way to get around this is to put the loan in her name only, assuming she would qualify on her income alone.

By 2010 you should have no problem raising your scores in the 700's....assuming good payment history from this day forward. 

[Anonymous]

Oh wow, no pressure. 

[Anonymous]

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@Anonymous wrote:

My credit score is abyssmal (550 but slowly rising) due to some stupid mistakes made 3 years ago.  My wifes credit is very good at 750.  We are going to use this year to pay off all of my old debts in preperation for the house purchase.

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Please take a detour to the Rebuilding Your Credit board before paying any old debts.  You didn't mention specifics but for example, say you have a collection account and you simply pay it.  Your score will not increase any, and on top of that you would lose your leverage to get them to delete it.  The folks on the board have ironed out details to get the best results for your efforts

[Anonymous]

You can do it!  Really if you go to the rebuilding forum and read up.  Pay for Delete on those collections, don't just pay them off.

Time is the best medicine for your score.