Shane-Please help me decide if I can qualify

[Anonymous]

I have credit scores hovering around the 600-620 range. I can't seem to bring it up because I do not have nor ever had a mortgage. My husband declared bankruptcy that has been paid and discharged. His credit rating is also hovering around 620. I have been at my job making 90k annually for 3 years. My husband has been employed at the same hospital for 23 years and makes approx 52k annually. I have a car payment of $890.00 with my bank that I've been paying on time for 2.5 years. I have 2 credit cards that are never  utilized over 20%, but usually around 9%. I have a solid 3 year rental history evidenced by automatic payments from my bank. My credit issues related to student loans after my divorce that I completed the rehabilitation program and made timely payments for the past 2 years. We have about $10k in assets. I have one ding in the last 2 years that is medical and less than $1200. My total monthly obligations without rent is approx $1750. I'm really nervous about this process. We are looking at homes in the 76012 area at 175k-225k range. Should I forget it, modify my price range, or go for it?

[StartingOver10]

Do you carry balances on both of your credit cards?

If so, then pay one of them off so it reports zero. There will be a bump in your score. FICO measures not only the utilization on each card but the balances you carry across cards and how many cards have balances. You would be better off having 3 cc tradelines with two reporting zero but since you only have two cc's (from your post) make certain to have only one report a very small balance (even less than 9%) to optimize your score.

Not having a mortgage tradeline does not keep your score under 620. Your installment tradeline is there with the auto payment.

The medical collection will though. Collections are a big hit and it is recent so it is affecting your score.  Google the 'why chat hippa method' to get rid of the collection.

[Anonymous]

The credit card issue has me a bit stumped. I inadvertently paid off my credit cards one month and my credit score dropped 15 points because it said my credit utilization decreased. The next month, I left a nominal balance (less than $100 on a card with $3000 credit limit) and my credit dropped the next month by another 5 points because my credit utilization increased. It isn't that I can't afford to pay them off every month, it is that I am afraid it will hurt my credit score as it has in the recent past.

With my current credit rating, is it impossible to qualify for a mortgage even though my credit history has been almost flawless for close to 3 years? I admit that my past choices have been very bad, spending most of my life with my head in the sand when it comes to credit because it was easier to do that than fight with my now ex-husband about finances. I have shed the bad habits and the bad hubby LOL but am still trying to overcome the past. UGH!

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@StartingOver10 wrote:

Do you carry balances on both of your credit cards?

If so, then pay one of them off so it reports zero. There will be a bump in your score. FICO measures not only the utilization on each card but the balances you carry across cards and how many cards have balances. You would be better off having 3 cc tradelines with two reporting zero but since you only have two cc's (from your post) make certain to have only one report a very small balance (even less than 9%) to optimize your score.

Not having a mortgage tradeline does not keep your score under 620. Your installment tradeline is there with the auto payment.

The medical collection will though. Collections are a big hit and it is recent so it is affecting your score.  Google the 'why chat hippa method' to get rid of the collection.

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[StartingOver10]

Which scores are you using? Credit Karma? myFICO? Going direct to Experian, Equifax, TransUnion?

[Anonymous]

CreditKarma and Credit.com

[TheGardner]

Unfortunately those scores may or MAY NOT be remotely close to your actual scores. I would make sure all cards are paid off with 1 reporting less than 10% and apply through a lender to get your scores. This could help in a couple ways, one you get to see where you sit. 2 any old collections that are lurking you can address. 3. A loan officer can tell you what you need to get your scores to the right place if you are off.

Good luck!

[efranklin23]

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@Anonymous wrote:

CreditKarma and Credit.com

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Before you get started, you should buy your credit scores (All 3) from MyFico so you have an idea what your real credit scores are. My CK scores are 50 points away from my actually from FICO while my Credit.com scores are a few points off. FAKO scores are never accurate.

And another thing, if you pay off your credit cards every month, that willincrease your credit score as Credit Utilization will decrease. Mortgage lenders like to see very low credit utilization use on your credit cards as it will affect your DTI ratio.

[TheGardner]

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@efranklin23 wrote:

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@Anonymous wrote:

CreditKarma and Credit.com

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Before you get started, you should buy your credit scores (All 3) from MyFico so you have an idea what your real credit scores are. My CK scores are 50 points away from my actually from FICO while my Credit.com scores are a few points off. FAKO scores are never accurate.

And another thing, if you pay off your credit cards every month, that willincrease your credit score as Credit Utilization will decrease. Mortgage lenders like to see very low credit utilization use on your credit cards as it will affect your DTI ratio.

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MyFICO scores are worthless as well for mortgages. Will have the same problem with huge differences between models.

[FSFdoppleganger]

+1

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@TheGardner wrote:

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@efranklin23 wrote:

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@Anonymous wrote:

CreditKarma and Credit.com

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Before you get started, you should buy your credit scores (All 3) from MyFico so you have an idea what your real credit scores are. My CK scores are 50 points away from my actually from FICO while my Credit.com scores are a few points off. FAKO scores are never accurate.

And another thing, if you pay off your credit cards every month, that willincrease your credit score as Credit Utilization will decrease. Mortgage lenders like to see very low credit utilization use on your credit cards as it will affect your DTI ratio.

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MyFICO scores are worthless as well for mortgages. Will have the same problem with huge differences between models.

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+1

The only Myfico score that matches the lenders for mortgage is Equifax. TU and EX are just like FAKO for mortgage companies.

[TimeToRecover]

The only Myfico score that matches the lenders for mortgage is Equifax. TU and EX are just like FAKO for mortgage companies.

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Actually Doppleganger this is not true anymore.  MyFico changed EQ to the 08 model.