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USDA Guaranteed Loan Approval Needed HELP

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hopefulKT
New Contributor

USDA Guaranteed Loan Approval Needed HELP

Hi, All.

 

I'm new to the forum and have recieved a wealth of information just by exploring the community.

 

My husband and I are looking at purchasing a home in the future (6-12 months hopefully); his credit score is fine (above the 640 benchmark), mine is bringing us down. I'm sitting on a 559 (I know, OUCH). The 559 is due to some very stupid financial decisions in college. What's really dragging down my score are collection accounts (credit card charge-offs and medical bills) with a grand total near $2,800. We are hoping to get a USDA loan--the location qualifies and we meet the income requirements for the guarenteed program. I've spoke with a loan officer and a broker, both have said that I need to pay off the collections ASAP. I really don't mind paying a debt that is mine, but I don't want it to negatively effect my credit score. All of the collection accounts were opened 2+ years ago, so I'm worried that by bringing it current my credit score will drop. I've read several posts that others have shared regarding this--most are required to pay off the collections at closing (in order to avoid an adverse effect on their credit score which would cause them to not be approved for the loan). What do I do? The FicoSimulator estimates that my score will be in the 640 range within 6 months just by paying down a significant amount of credit card debt (I hope it's not being overly optimisitc). All advice is appreciated. 

Starting Score: EQ 559 (June12)
TU 651 (spouse) (June12)
November12 score (Equifax myfico):
Me: 646
Spouse: 691
Getting ready to close on our first home Smiley Happy
Message 1 of 7
6 REPLIES 6
Anonymous
Not applicable

Re: USDA Guaranteed Loan Approval Needed HELP

I did USDA direct. Had two small open collections and an open judgement. Had to pay both before they would approve me.
Message 2 of 7
sherakay
Valued Member

Re: USDA Guaranteed Loan Approval Needed HELP

I am doing USDA Guaranteed and am wondering why you had to pay off your small collections with such high scores that I read about on a different post that you had?


Starting Score: Walmart myfico 664 TU Lender Pull 690 EQ Lender Pull 669
Current Score: Walmart myfico 698 TU Equifax- 686 Experian- 692 Transunion- 700 Lender Pull 7/18/12
Goal Score: 720


Take the FICO Fitness Challenge
Message 3 of 7
Anonymous
Not applicable

Re: USDA Guaranteed Loan Approval Needed HELP

R u talking to me sherakay?
I did direct. With guaranteed it may be different based on what lender you use. my score were 652 670 and 698? So not they are ok but I would say high.
Message 4 of 7
Anonymous
Not applicable

Re: USDA Guaranteed Loan Approval Needed HELP

Wow. Autocorrect fail there (posting on iPhone) that last sentence should say " so they are ok but I wouldn't say high"
Message 5 of 7
germaine47
Frequent Contributor

Re: USDA Guaranteed Loan Approval Needed HELP

If that is what your MB requires then by all means do so.  I would send PFD to the collections Agencies, I know the task seems daunting but I guarantee you that if they are removed from your report you will see a significant change in your scores.  I had collections and one C/O: I PFD the collections and my Experian Score went from the 590s to 646 within one month of them being removed.  Good Luck

Fico September 2012; TU 681, EX 674, EQ 652
Fako October 2012: TU 706, EX 641,
Message 6 of 7
sherakay
Valued Member

Re: USDA Guaranteed Loan Approval Needed HELP


@Anonymous wrote:
R u talking to me sherakay?
I did direct. With guaranteed it may be different based on what lender you use. my score were 652 670 and 698? So not they are ok but I would say high.

Yeah, I have 690 that I saw on Walmart Fico and other than a dispute that the lender said had to be 'resolved' she didn't say I had to pay it off. They want the full $1445 to do a PFD, and I'm not paying that, cause I don't owe that. 

 

I have to call Experian tomorrow to see about getting that dispute notation removed asap. 


Starting Score: Walmart myfico 664 TU Lender Pull 690 EQ Lender Pull 669
Current Score: Walmart myfico 698 TU Equifax- 686 Experian- 692 Transunion- 700 Lender Pull 7/18/12
Goal Score: 720


Take the FICO Fitness Challenge
Message 7 of 7
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