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Posts: 56
Registered: ‎05-08-2012
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Trying to get credit score up to qualify for USDA Loan.

I am very new to this. I have been trying to find out as much information about raising my husbands credit score enough to qualify for a USDA loan. I have a few questions:

 

1. We used Identity Guard to get his scores: Equifax 559Experian 556TransUnion 608. Is this an accurate place to get scores from? Where is the best place to pull that will be closest to numbers pulled for loan preapproval?

 

2. My husband has 120+ of late payment on one student loan, he just finished a rehabilitation in September for this loan and they said they will remove the late payments. The loan was finally picked up and they said everything is good so the late payments should be fixed in the next 30-45 days (this was on 5/1). Has anyone been through this, how much did it help your credit score? Also does it matter that the loan was not picked up by the original lender? It used to be Wells Fargo and now it is some Great Lakes company.  

 

3. We spoke with a Mortgage Broker  (whom is a family friend) who told us steps to take to help raise our credit score. I am weary of some of the advice (since it is the opposite of what I have read), but did it anyways. So now I am wondering if we ended up hurting his score.

a.) He told us to pay down my husband's credit card, but leave $10 on the balance. Husband's balance was close to limit ($700). We paid it down to $10, is that really better than just paying it off?

b.) He told us to open two secured credit cards in my husbands names, since my husband only had one credit line other than student loans. We looked for the ones that got best reviews and report to all three bureaus . Capital One and Orchard Bank. Orchard Bank just gave him a regular Credit card, with $300 limit. Capital one we just put $200 limit on. I have always thought that opening credit cards hurts credit first before helping? Or does having more credit lines help more than hurt?

c.)He told us to use all the credit cards for one small purchase a month and then pay it right back down to $10. 

 

4. My husband had only one collection item on his report. Only TU and EQ were reporting it. TU wasn't showing it as being paid off, while EQ was. He had paid it off last year so I disputed it. Will that help his score, or not really do much?

 

5. So after all this the MB wants to pull credit on June 11th (that's waiting the 45 days for the student loan to be updated) to see if everything is fixed and if we can get pre-approved. So my question is are we better off pulling it ourselves first (and if so from where?) to see if his score is high enough and if the student loan is fixed?

 

Thanks in advance for any help, I am sure you can tell by me not knowing the lingo just how new to this I am. So I appreciate any advice I can get. 

 





 



Established Member
Posts: 24
Registered: ‎03-01-2012
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Re: Trying to get credit score up to qualify for USDA Loan.

Any credit pulls you do are soft pulls. I would recommend you do a soft pull before the lo does a hard pull. The hard pull will hurt a bit and the soft pull wont affect your scores. I got bad advice last year and didn't realize how much hard pulls affect things. You are better off monitoring things yourself. Then tell the LO when to pull. By the time I found this site the mortgage broker had done 5 hard pulls on my credit. 

 

From my experience since banks use different scorings techniques I would say getting your score from myfico.com is your first step towards something more accurate. 

 

If the 120+ isn't removed when you check your report I would first make a phone call on it and then send a letter to have it removed. Everytime you speak with someone on the phone write down there name and the time you called so you always have a reference. 

 

This is where I would start. I hope it helps. 


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Re: Trying to get credit score up to qualify for USDA Loan.


Melissalyn17 wrote:

I am very new to this. I have been trying to find out as much information about raising my husbands credit score enough to qualify for a USDA loan. I have a few questions:

 

1. We used Identity Guard to get his scores: Equifax 559Experian 556TransUnion 608. Is this an accurate place to get scores from? Where is the best place to pull that will be closest to numbers pulled for loan preapproval?

 

These smell of FAKOs to me, which means that these aren't your real scores unless they were lender pulled. I have no idea what Identity Guard is, but if you guys got it yourselves off the internet, then you really have no idea what your true FICO scores are.

 

2. My husband has 120+ of late payment on one student loan, he just finished a rehabilitation in September for this loan and they said they will remove the late payments. The loan was finally picked up and they said everything is good so the late payments should be fixed in the next 30-45 days (this was on 5/1). Has anyone been through this, how much did it help your credit score? Also does it matter that the loan was not picked up by the original lender? It used to be Wells Fargo and now it is some Great Lakes company.  

 

If all of the lates are completely deleted, then it should boost your score. That's if the account is left as a "positive standing". I have little experience with lates though, so hopefully someone will chime in with better advice and insight than myself.

 

3. We spoke with a Mortgage Broker  (whom is a family friend) who told us steps to take to help raise our credit score. I am weary of some of the advice (since it is the opposite of what I have read), but did it anyways. So now I am wondering if we ended up hurting his score.

a.) He told us to pay down my husband's credit card, but leave $10 on the balance. Husband's balance was close to limit ($700). We paid it down to $10, is that really better than just paying it off?

b.) He told us to open two secured credit cards in my husbands names, since my husband only had one credit line other than student loans. We looked for the ones that got best reviews and report to all three bureaus . Capital One and Orchard Bank. Orchard Bank just gave him a regular Credit card, with $300 limit. Capital one we just put $200 limit on. I have always thought that opening credit cards hurts credit first before helping? Or does having more credit lines help more than hurt?

c.)He told us to use all the credit cards for one small purchase a month and then pay it right back down to $10. 

 

 

a. Yes, this would be correct. But you need to let it report $10 before the statement date, and then pay it off before the due date. The statement date and the due date are two different things.

b. Opening credit cards will initially "hurt"  your scores because of the inquiries, but in the long-term, it helps to show positive payments on multiple cards, not just for your FICO score but for lender confidence as well.

c. Slightly correct. Use all credit cards, but pay 2 of them to 0 before the statement date. Leave only ONE card to report the $10 balance ON the statement date and then pay in full before the due date.

 

4. My husband had only one collection item on his report. Only TU and EQ were reporting it. TU wasn't showing it as being paid off, while EQ was. He had paid it off last year so I disputed it. Will that help his score, or not really do much?

 

Transunion tends to be a little sloooooow. Paying off an item does not help your score, it'll just change the mark. It looks preferrable to a lender though, to have it paid off, but as far as FICO scores are concerned, it won't help. The only thing that would help is having it deleted completely.

 

5. So after all this the MB wants to pull credit on June 11th (that's waiting the 45 days for the student loan to be updated) to see if everything is fixed and if we can get pre-approved. So my question is are we better off pulling it ourselves first (and if so from where?) to see if his score is high enough and if the student loan is fixed?

 

I would HIGHLY suggest for you guys to pull a credit report right before you head over there on the 11th. Doing so will NOT affect your credit score since it is a soft pull. That way, you have a better idea of what you are up against. And make sure you get at least the Equifax Credit Score from the FICO website HERE. It helps you none to pull FAKOs from all over the internet. This website can give you access to the Equifax FICO score and an older version of the Transunion FICO score.

 

 

Thanks in advance for any help, I am sure you can tell by me not knowing the lingo just how new to this I am. So I appreciate any advice I can get. 

 





 





Good luck, answers in bold and red above.

Hopefully this works out for ya!

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New Contributor
Posts: 56
Registered: ‎05-08-2012
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Re: Trying to get credit score up to qualify for USDA Loan.

I just paid his card down to $10 at the end of last month, payment was due 5/15. So if I leave it there until after the 15th it will then show up as my balance for June, then I pay it off immediately? Then use the card and pay it back down to $10 again, or switch the $10 balance to another card? Just trying to make sure I understand what you are saying.

 Thanks!

Contributor
Posts: 102
Registered: ‎01-10-2012
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Re: Trying to get credit score up to qualify for USDA Loan.

My girlfriend and myself both rehabilitated our student loans within the last two years.  We were both in default and the rehabilitation allowed us to have the loans come out of default and be picked up by another lender.  The loans show up as paid on our credit reports but DO NOT take away the latenesses that were attached to them.  So we have two old accounts, or in my case 6, that were defaulted, rehabbed, paid off and are now new "good" loans.  When our credit is pulled, a lender can tell that we had issues with student loans in the past, but hopefully they can also see that we have rectified the situation and are improved.  I don't want to discourage you, just want to be realistic so you know what to expect.  Just an FYI my scores went up by 72 points when my rehabilitation was completed and my girlfriend's went up by 45. 

New Contributor
Posts: 71
Registered: ‎02-26-2012
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Re: Trying to get credit score up to qualify for USDA Loan.

Melissalynn - Most credit cards report the balance to the CRA's on the date the statement is cut, which is different than the due date. You need to find out what your actual statement dates are and time your payments to be sure that the balances are $0, $0, $10 on the three cards on the day their statements cut. Hope this helps!

New Contributor
Posts: 56
Registered: ‎05-08-2012
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Re: Trying to get credit score up to qualify for USDA Loan.

I have just come across posts about disputes comments holding up closings. We aren't trying to get per-approved until next month at the earliest so it will be over a month after filing the disputes, so they should be closed by then, right? Do comments stay on even after the dispute is closed? I would hate for us trying to correct his credit report to hurt us. :/
Valued Contributor
Posts: 1,540
Registered: ‎10-25-2011
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Re: Trying to get credit score up to qualify for USDA Loan.

Comments may very well stay on even after the dispute is closed..... disputes also usually take 45 days (or what i give them) if you are about to get pre approved, simply follow this process to get the disputes removed and go on about your way.

 

http://ficoforums.myfico.com/t5/Mortgage-Loans/Best-Way-to-Remove-quot-Account-In-Dispute-quot-for-M...

 

it takes 24-48 hours to get disputes/comments removed.... mine took 3 hours! :smileyhappy: awesome process. 

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New Contributor
Posts: 56
Registered: ‎05-08-2012
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Re: Trying to get credit score up to qualify for USDA Loan.

Thank you so much. Should I wait to see if it gets resolved and then have them remove comments that may be left over? Did you have luck calling and getting them removed through the customer service reps?

Valued Contributor
Posts: 1,540
Registered: ‎10-25-2011
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Re: Trying to get credit score up to qualify for USDA Loan.

I have called all 3 and had success with all 3 :smileyhappy: Shane wrote up a GREAT article there. 

----- IF you find my post helpful, Select the star in the KUDOS button! :smileyhappy:
Starting Score: 512 10/2011 Current Score: EQ: 686 | TU: 689 | EX: 690
In My Wallet: SFCU Visa: $10,000 | UECU Visa: $5000 | WellsFargo: $3900 | Cap1 QS: $3500 | Cap1 QS: $3000 | Cap1 AU: $3250

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