10-08-2012 12:47 AM - edited 10-08-2012 12:49 AM
New here and have a few basic questions.
As the title asks.. I have pretty much everything covered outside of polishing off my credit score when it comes to obtaining a home mortgage. I've been with the same employer for 2 years and make a reasonable income. I've rented at the same address for the past 2 years as well. I have even managed to save enough for a down payment & closing costs.
Everything seems to be inline with the exception of my credit report, I was sitting at roughly 574 about 6 months ago, when I first started working on it and just this month I finally broke roughly 630.
Prior to this I had a small business which went south & causing me to default on 3 credit cards and get behind on my auto loan. I managed to hold on to the auto loan despite going 60 days late & 30 a few times but in the end I paid it off about a year & half ago. The credit cards however were charge offs (3 of them).
My score has now started to reach the area that is high enough to get a home loan, but I'm curious if the credit card charge offs will still keep me from getting a loan? Will the lenders still turn me down for these charge offs even if my score is high enough and all other bases are covered?
I'm looking at a basic FHA loan or potentially a USDA due to my location.
10-08-2012 07:05 AM
To me, and I am no professional, but IMO credit score is what you need just to get you in the door when applying for a mortgage. Yes, it's a gauge to see where you are in credit worthiness and whether you might qualify but it doesn't end there.
Because you have three charge offs I do see how it can be a problem. I think it depends on how much, and how long ago. There is a lot of back and forth as to whether these will have to get paid, and I think they may need to but its best to go on the advice of your lender.
I guess the only way you will no for sure is by applying. Good Luck.
10-08-2012 07:35 AM
FHA usually wants to see no lates newer than 12 months, i.e. they have to be at least 12 months old, and the older the better. YMMV, but you should be ok.
10-08-2012 01:30 PM - edited 10-08-2012 01:33 PM
Yea my defualts happened in 2010 but with Experian it says my last negitive listing was 1.6 years ago. (I assume they could the date of the charge off)
10-09-2012 06:25 PM
Generally speaking, the more of your bad debt that you repay, the better you look to your new lending insitutuion. So for peace of mind, it would serve you best if you would pay off your old debts.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.