Paid Judgments

[terrymac]

Hi everyone,

I am hoping someone can answer this question for me. I am working on my credit so I can purchase a first home next year. At the moment, I have a judgment on my report. The judgment has been paid and is set to fall off my credit report in 2013 . What I want to know is, would I have a problem getting approved for a mortgage loan in 2012?

Any advice/info would be great.

Myfico scores: TU 614; EQ 614; FAKO EX 651 

[ShanetheMortgageMan]

If the paid judgment is the only item, then it shouldn't have a huge impact... however with 614'ish scores I suspect there may also be some more recent negative credit (high credit card utilization, late payments, collections, etc.) than a judgment that is scheduled to fall off in 2 years.  Is the judgment the only item?  Do you not have much re-established credit since the judgment occured?

[terrymac]

Thanks for answering Shane. I also have a paid collection on my account that I am trying to GW. The utilization on my CC is very high, and am also slowly paying it down. Have never been late with this card, but on my AnnTaylor card, I was late few times. Have paid the card off and it now has a $0 balance. The biggest delinquent on my account is from Dell for $2280. Have made arrangements with them to pay it and hopefully bring it up to date. All my student loans were paid for last year, and I just paid two recent past bills from Verizon.  I am hoping to pay off everything by the end of Summer, which will hopefully bring my scores up to qualify for a mortgage. Once I have paid all of these off, do you think the judgment will be a hindrance?

Thanks for reading and answering again.

[ShanetheMortgageMan]

With those items, the judgment plays a bit more importance.  It is paid though, so it is looked at by underwriting as just like a giant collection that was paid... so while it's not good to have a judgment (hurts your scores quite a bit) it's not as big as you may think.  What is more important are any recent negatives, such as the recent Verizon bills, and perhaps that Dell account and when those AnnTaylor card lates were... with those items coming after the judgment, an underwriter will especially require you to have 12 or more months of no new late payments or delinquencies.  If the judgment wasn't there, then 12 months of no new late payments/delinquencies should likely do the trick.