Need serious advice.

[ineedahome]

Im brand new to the forums. Im 21 years old and trying to buy my first house. My fico score is a low 530. I got medically discharged from the military and ran into financial difficulties while recovering and trying to find a new job. My mortgage lender is confident he can get me approved in about 3 weeks if i do what he says.

Current negatives on my credit report:

1 medical collection- $174.00 less then 1 month old, paid and being removed within 10 days. (lender said to do this)

1 personal loan- 5 late payments last year, paid off 6 months ago.

1 credit card- $600 several lates, 30's,60's and some 120's- settled and paid off 2 weeks ago (lender said to do this)

Current positives on my credit report:

1 credit card- 2 years old, no lates, although its maxed out $9700 with a 10k spending limit.

1 credit card- 1 year old, no lates, 0 balance, 400 spending limit.

and 9 other accounts,closed, all paid as agreed with no lates or anything. My credit history is 3 years 3 months old, with the oldest account being 2.5 years old.

Is this mortgage lender serious about getting me preapproved, looking at my credit report? I also need general advise when it comes to my report. Im just learning about all of this.

[Anonymous]

First I would double-check your lender's recommendations with the boards as far as repairing credit - the Rebuilding Your Credit board is great at evaluating negative items.  Loan officers usually aren't experts in credit repair and they occasionally give advice that causes scores to go down and then be denied the loan.  Definitely good to get the medical collection paid and removed.  Hopefully they agreed in writing to remove   That should give you a nice little boost.

Not sure about the advice on the credit card.  If that was a charge off or collection from a few years ago it could hurt your score to be paying now.  You might consider offering to pay the full amount if they will delete the record (get in writing before sending $).  Also concerned about the lates.  Underwriters like to see a year's worth of clean history.  They can often overlook one or two lates but 5 lates in a year might be a bit much.  Have you tried asking them to remove the lates for you?  If you search the forums for "GW" you'll find more information.

Good luck!  You'll get there. 

[Lel]

Hi ineedahome, and welcome to the forums.

There's some missing information that will help other members with your questions.  Namely, what is your current income, and how long have you been at your current job?  What is the the cost of the home that you wish to purchase, and how much do you have for a down payment?

A couple general comments and questions based on what you've already posted:

I think your loan officer is being overly optimistic about your chances for approval.  Your credit score is far from what is needed to qualify, and it is impossible to predict how much your score will improve with the moves that you are making.

The medical collection - this was recently added.  Did the creditor collection agency actually tell you that they would remove the collection from your report, or just mark it as paid?  If the latter, then this very recent collection could sink your application.  Recent collections won't sit well with the lender.

The personal loan has a lot of late payments within the last year.  Lenders are not going to like this.

The credit card with the lates - how recent were these?  The 120 day lates will look bad.  And was this account really "settled" in the sense that you paid a lesser amount to close out the account?  Settled accounts are scored negatively.

Your utilization on your two existing credit cards is over 90%.  This is definitely hurting your score.  Paying down a large chunk of this, if possible, will gain you some points, potentially quite a few, but in the end it's very difficult to predict how your score will react to any specific move.

Sorry if this comes across as a bit harsh.  If you post the additional information mentioned above and clarify a couple questions related to the derogatory information, then maybe some more specific and refined answers will be forthcoming.

Good luck, and again, welcome.

[ineedahome]

Iv been at my current job for exactly 2 years I make just over 30k myself and my girlfriend makes 20k..she's got good credit and is co signing. The late payments were all recentl within the last year. The medical is being completly removed and I'm current on all my payments. Were trying to buy a house for 115 k

[Anonymous]

with multiple lates in the last year and the low scores, you probably will be unable to get a home loan right now.  Once the lates age paszt 12 months and your score gets back to over 620 then you should be in good shape.

[ineedahome]

Thats what I figured. The VA loan doesn't help me in my situation like i was hoping.