Professional or Experienced Advise, Please HELP

[korunner]

Here is the deal:

My credit score on 8/12 was 788 (that was the last time I checked it) I was laid off last year and at the same time I was pregnant. I became VERY ill and was in the hospital for 21 days. I was on disability, etc. At this same time we were carrying two mortgages. Basically a perfect storm. I started getting lates and could barely make ends meet after blowing through savings to pay the mortgages.

This past June I got a good job (six figure income for just me) and started to slowly turn things around. I now have zero CC debt, student loans are in repayment as of 11/24. I had no mortgage lates and had three medical collections that I have PFD for (one has posted the other two letters are in the hands of the bureau) and one credit card charge off with portfolio recovery that I am *trying* to negotiate down. 

My scores on myfico are 598/603/604  my lender mid score was 575. Yes, VERY different  And the scores have not updated to reflect two of the deleted collections or the zero balance on the credit cards but let's face it, I am not going to get 100 points for that! 

The house we live in now we sold in 6 days and it closes 12/19 and we are moving into the house we are hoping to buy that same week. The owner of the home we hope to buy is willing to let us lease it for upt o 90 days but I think he just wants it sold. And we HAVE to move for personal reasons or we would just wait. 

We have 30k to put down. The home is 28900. Our montly gross is in the 12k range. 

What would you do/suggest?

[StartingOver10]

Worst case: finance FHA with a large down payment (more than 10%). You will get a good rate even though you are sub-580 and the mortgage insurance will drop off after 11 years.  You will need to find one of the good mortgage bankers that will handle your file. Stay away from the big box banks like WF or BOA - you won't get anywhere, but they will take your application and mess with your file for 90 days before you find out they can't do it.

However, you should be able to refi into a conventional loan when you get your credit back on track. Before you make application, what is your utilization on the credit cards you have right now? That may be all you need to recover the points you need to get above 620 mid-score.

[korunner]

My utilization is zero for credit cards. I have a car payment and student loan. I have at least 10% to put down.

[Lemmus]

" I am not going to get 100 points for that!"

...probably not but you may well get what you need

...pick one of your CCs and get it to ~5% utilization and keep it there ...the sweet spot seems to be 3-9% utilization on one card, PIF the rest ...that should get you a 5-15 point boost by itself ...check out the CC forum for more info on that ...zero balances are not the best score generator.

...when the CA deletes all hit I'd expect a good jump well into the range you need  

...I was hoping StartingOver would jump in when your new thread hit and there she is 

[korunner]

ok, i did not realize that. i do hope the deletions from the CA really help. i guess i will use my discover card for a small purchase a couple times this month and pay  it. the limit is 15k so i guess i will have to make a lot of small purchases to show any utilization. lol honeslty, i just wish i could never ever use any credit cards!!! i think FHA will be the way we have to go and i am OK with that. i think the DU will feel i am a good risk based on the fact that all of my bads were in one very short time period and that has since resolved and i was never late on mortgages (had two at the time!). this sure has taught me a lesson. 

[Lemmus]

...you can always do what I'm doing ...pick a card and auto pay a couple non-CC bills each month using it ...then PIF the card after the statement ...I even auto that through the bank ...makes my life easier and keeps the scores optimized ...hth 

[korunner]

oh yes that is a VERY good idea. might do that with a utility bill or something. i appreciate your help. 

[korunner]

update: the lender did a rapid rescore and got my mid score high enough for an FHA loan. i had to do a three-way conference call with the student loan people and the people doing the rapid rescore. literally 18 hours later my score jumped 27 points.