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Member
Posts: 16
Registered: ‎02-08-2013
0

Need help not sure what i can do

I'm not sure what to do, last week my house burned down which was owner financed. Well now i can't find anything owner financed and I've found a house that me and my wife love but I would have to get a mortgage loan. My credit is poor. It's around a 590 i have around 10 accounts against me. 4 in collections and 4 that are charge offs and also portfollio recovery and midland funding in which both the SOL have been reached. I've contacted both PR and MLF to try and get a PFD with no luck. I talked with a lender and was told if i pay off the old debt that it would drop my score lower than what it already is. Most accounts are around 5 years old. She already advised me that there would be no way i could get a loan atm. I really dont know what to do. I have the money to pay off most of the debt except for a repossession but i've been reading even if you pay off charge accounts it won't help your credit. Can anyone give me advice on what i should do? Also i had insurance on the house ofc and i would be able to put a good size downpayment towards the new house of around 40k or some but the lender still said no  with so many negative marks against me.

Valued Contributor
Posts: 1,453
Registered: ‎04-14-2012
0

Re: Need help not sure what i can do

RENT!!!

 

Use part of the insurance money to start paying off your debt and save some of it for your "future" down payment when you can buy.

Start with your most recent debt.

Use these forums to do your homework on rebuilding your credit.

 

Sorry to hear about your home!!

*8/10/13
Frequent Contributor
Posts: 367
Registered: ‎01-14-2012
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Re: Need help not sure what i can do


dodfire wrote:

RENT!!!

 

Use part of the insurance money to start paying off your debt and save some of it for your "future" down payment when you can buy.

Start with your most recent debt.

Use these forums to do your homework on rebuilding your credit.

 

Sorry to hear about your home!!


+1 

 

Until you can improve your credit, renting is your best option. Head to the credit forum to get some tips on cleaning up your credit. 

 

Best of luck to you-

 

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
0

Re: Need help not sure what i can do

OMG! I am so sorry about the loss of your home! :'(

What you need to do is start writing PFD letters to the collection agencies. PFD stands for Pay for Delete. Work on a settlement with them. Settle for less the older the account is. Ask for something in writing saying they will remove the derogatory information after you pay the settlement amount. Call them night and day and send out a batch of letters once a week until those accounts are resolved. You are absolutely right that your score will tank if you pay them because it will place a more recent date on the collections. Many have successfully done this so don't get discouraged. Be sure to sign up for Score Watch so that you can monitor your true Equifax fico to track your progress and also to know when to apply for the mortgage. I would sign a 6 month lease somewhere while you work on clearing up your credit, OK? If you are super proactive, you might get to 620 by the time the lease is up. You probably won't need all of them removed so if one or two don't budge after MULTIPLE attempts, work on the others. A lot of times, they won't work on first try, but maybe the 3rd or 4th try. Do not give up! Keep bugging them by calling and sending letters. Paid COs and collections should be good willed (GW'd). GWs are harder to pull off that is why you don't want to pay until you have something in writing saying they will delete. You can find PFD and GW letter templates on the Rebuilding Your Credit forum here at myfico.

Lastly, you need to start building positive history. Apply for a couple of secured credit cards and pay your bill in full every month. Lenders like to see 3-4 active positive trade lines on your credit to evaluate if you have learned how to managed credit.

Don't keep kicking the can down the road by looking for ways to buy that doesn't require a credit check. These avenues don't build equity or positive credit history in your name. Be proactive and don't ignore it. For collections that are past SOL, send cease and desist letters to those companies.

God Bless you and your wife. Things will get better if you work diligently on your credit. You will most likely qualify in 6-12 months if you work really hard.

Also, see if you can start the mortgage process with NACA right now. Their website is www.naca.com
NACA does NOT approve based on credit score. They have 14 pages of other requirements that have to be met. These are on their website. It can take 6-24 months to qualify with them but it is worth it and will be another path to homeownership. Use either FHA or NACA, depending on which one will qualify you first.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Member
Posts: 16
Registered: ‎02-08-2013
0

Re: Need help not sure what i can do

What if i get a Co- signer that has almost perfect credit. Will that matter since my credit is so bad?

Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: Need help not sure what i can do

No. The lowest credit mid score is what matters
Good Luck
May all your dreams and wishes become a reality!
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
0

Re: Need help not sure what i can do

All applicants must qualify, unfortunately. Co-signers only add income.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
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Super Contributor
Posts: 6,697
Registered: ‎07-03-2007
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Re: Need help not sure what i can do

rent for a while and try to build up some credit to balance all of the bad

 

 

 

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