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I have read many threads but feel a bit overwhelmed and would appreciate anyone's advice.
I applied for a mortgage loan and was sent a denial letter stating my median score was 617, my scores from freecreditreport were 572 in feb/09.
I have a cap1 cc CO from 10/05 for $1700 and a wamu/prov cc CO from 11/05 for $1100, I am assuming with OCs, as no CAs reporting. I am able to PIF but not sure if this would help or hurt my chances of getting a loan. Also 2 medical collections paid from 03/07.
I also have 3 defaulted private SLs (each under $1200) that I have since rehabbed and have been current w/ no lates since 01/08 showing as 3 negs and 3 good standing(were not sold: same lender). I have another SL for $25000 that has never been late.
I am a recent college graduate and have been w/ current employer since 09/08. I currently make $42000/yr and expect a salary increase in July to $50000. I have $10000 in available savings.
I would like to be able to purchase a home in 1yr (approx $180K in TN). Is this realistic with my current credit problems?
What should I do to become eligible for a loan? Any suggestions are greatly appreciated
@Anonymous wrote:I have read many threads but feel a bit overwhelmed and would appreciate anyone's advice.
I applied for a mortgage loan and was sent a denial letter stating my median score was 617, my scores from freecreditreport were 572 in feb/09.
I have a cap1 cc CO from 10/05 for $1700 and a wamu/prov cc CO from 11/05 for $1100, I am assuming with OCs, as no CAs reporting. I am able to PIF but not sure if this would help or hurt my chances of getting a loan. Also 2 medical collections paid from 03/07.
I also have 3 defaulted private SLs (each under $1200) that I have since rehabbed and have been current w/ no lates since 01/08 showing as 3 negs and 3 good standing(were not sold: same lender). I have another SL for $25000 that has never been late.
I am a recent college graduate and have been w/ current employer since 09/08. I currently make $42000/yr and expect a salary increase in July to $50000. I have $10000 in available savings.
I would like to be able to purchase a home in 1yr (approx $180K in TN). Is this realistic with my current credit problems?
Of course it's realistic!! You're only 3 points away from qualifying!!
What should I do to become eligible for a loan? Any suggestions are greatly appreciated
Do you have ANY open, good standing credit card accounts? If not, adding a card or two (and keeping the balances super low and paying in full each month) would be ideal and would add to your "mix of credit." If you have no current CCs reporting, by adding one, you could 10-40 points right there.
Another thing might be to pay off (or settle) those COs. While you usually don't want to pay off old COs or collections if you don't *have* to, those COs are being seen as maxxed out credit cards by FICO (thus, you're automatically at 100% utilization -- FICO hates that).
While you would see an initial ding from those old COs being updated (FICO would see them as "new" ), the ding would, IMO, be outweighed by the reduction in utilization -- which would probably help your scores by about 20-50 points.
So bottom line: within about 6 months, you should be able to apply -- possibly sooner if you can reduce your utilization AND get a good-standing CC in your mix.
@Anonymous wrote:
Thank You for your input. Would a secured credit card be the way to go?