USDA loan help

[brown67]

Really want to get into a home.  Wife and I are looking at homes in an USDA approved area.  $77000 income which is ok for this area.

Credit score:  Equifax 591  Experian 626  Transunion 614.

Debt:

Car :                    $18000                Payment  $398

Credit card:        $400                                        $15             Credit Limit  $500

Parent Plus

loan:                    $6653                                       $80

Bought the car in Dec and paid a car off in Feb.  Had some late payments with the old car that were only a couple months old.  New car was set up to pay weekly and has been on time since we took the loan out.  Credit card taken out in Dec. and always on time. Parent plus loan taken out Sept 2010 and always on time.

We are looking at a Ryland home that is $250000.  Builder giving $10000 in incentives which can be used for closing costs.  I think I need a 620 credit score to get one of these loans and I'm wondering how long it will take to move my scores above 620.  Also any tips to raise my scores.  Really tired of renting and with housing prices and interest rates so low I'm hoping to get into a home this year.  Builder said it would take 5 months to build.  Any problems building a home with a USDA loan.

[oneilldn]

The first thing I'll do is to find an email of a VP or even the CEO of the bank which you have the late payments (probably the main reason is keeping your score low), and send them some emails asking for their help in removing the late payments, just be honest in your emails, work best. The key is not giving up. I had many late payments in the past due to being inresponsible, I changed, and they saw that in my emails. My CR show no late payments at all now.

Second thing I'll do is paid off the credit card, while is only $400, is almost 80% of your limit, which is killing your score as well.

and third, ( is not what you want to hear) if you are not up-side down on car, sell it. That's what I did, I had a very nice 300C and I looked good in it, for now, I'm driving a Hyundai, but I look way better in my new house and no car payment

There is no problem building a house wit USDA, but do require 640 score now.

It comes down to how bad you want it.... 

Good luck.

[MBOhio2]

As previous poster said, paying your credit card down to below 10% of the credit limit could give you a big boost and should absolutely take your middle score over 620. CC usage is a huge factor in credit scoring.

[pmarti8]

Welcome to the boards!!! I'm just going to go line by line of your post to answer your questions. 

"Really want to get into a home.  Wife and I are looking at homes in an USDA approved area.  $77000 income which is ok for this area."

- The very first thing you should do is go to the USDA website and see if your income with your family size is eligible for this program.  Here's the link:

http://www.rurdev.usda.gov/HSF-Guar_Income_Limits.html

"Credit score:  Equifax 591  Experian 626  Transunion 614."

- Raise the mid score to a minimum of 640 you will go through the streamlined process which requires less paperwork verification.

"Debt:

Car :                    $18000                Payment  $398

Credit card:        $400                                        $15             Credit Limit  $500

 Parent Plus

loan:                    $6653                                       $80"

- Your debt to income ratio seems very good.  The USDA doesn't want your debts and mortgage cost to exceed 41% of your pre-tax income.  Going off of these numbers you should be fine.  Why is your credit card balance so high in relation to the limit? You seem to make an income where you would not need to carry over $400 in credit card debt pay this down $50 and leave it at that balance until your loan is approved.  Paying the credit card alone may boost your score the few points you need to reach 640.

"Bought the car in Dec and paid a car off in Feb.  Had some late payments with the old car that were only a couple months old.  New car was set up to pay weekly and has been on time since we took the loan out. "

Edited. Advocating or suggesting the disputing of accurate information violates our Credit Repair Discussion Guidelines, Terms of Service, and User Guidelines that prohibit the promotion of certain types of credit repair. - llecs, myFICO moderator

"Credit card taken out in Dec. And always on time. Parent plus loan taken out Sept 2010 and always on time."

-Good.  You will need at least 6 months of good payments on these accounts before you will notice an increase in score.

"We are looking at a Ryland home that is $250000.  Builder giving $10000 in incentives which can be used for closing costs.  I think I need a 620 credit score to get one of these loans and I'm wondering how long it will take to move my scores above 620."

- Sounds nice, shoot for a 640 and you shouldn't have any problems.

  "Also any tips to raise my scores."

- yes the very first thing you  should do is pay down the credit card and never run it up that high again. Doing this will really help your score.

"Any problems building a home with a USDA loan."

- No as long as your home meets their approval.  They won't approve mansions and they do not like homes with in ground pools. 

[pmarti8]

"Really want to get into a home.  Wife and I are looking at homes in an USDA approved area.  $77000 income which is ok for this area."

- The very first thing you should do is go to the USDA website and see if your income with your family size is eligible for this program.  Here's the link:

http://www.rurdev.usda.gov/HSF-Guar_Income_Limits.html

"Credit score:  Equifax 591  Experian 626  Transunion 614."

- Raise the mid score to a minimum of 640 you will go through the streamlined process which requires less paperwork verification.

"Debt:

Car :                    $18000                Payment  $398

Credit card:        $400                                        $15             Credit Limit  $500

 Parent Plus

loan:                    $6653                                       $80"

- Your debt to income ratio seems very good.  The USDA doesn't want your debts and mortgage cost to exceed 41% of your pre-tax income.  Going off of these numbers you should be fine.  Why is your credit card balance so high in relation to the limit? You seem to make an income where you would not need to carry over $400 in credit card debt pay this down $50 and leave it at that balance until your loan is approved.  Paying the credit card alone may boost your score the few points you need to reach 640.

"Bought the car in Dec and paid a car off in Feb.  Had some late payments with the old car that were only a couple months old.  New car was set up to pay weekly and has been on time since we took the loan out. "

Edited. Advocating or suggesting the disputing of accurate information violates our Credit Repair Discussion Guidelines, Terms of Service, and User Guidelines that prohibit the promotion of certain types of credit repair. - llecs, myFICO moderator

"Credit card taken out in Dec. And always on time. Parent plus loan taken out Sept 2010 and always on time."

-Good.  You will need at least 6 months of good payments on these accounts before you will notice an increase in score.

"We are looking at a Ryland home that is $250000.  Builder giving $10000 in incentives which can be used for closing costs.  I think I need a 620 credit score to get one of these loans and I'm wondering how long it will take to move my scores above 620."

- Sounds nice, shoot for a 640 and you shouldn't have any problems.

  "Also any tips to raise my scores."

- yes the very first thing you  should do is pay down the credit card and never run it up that high again. Doing this will really help your score.

"Any problems building a home with a USDA loan."

- No as long as your home meets their approval.  They won't approve mansions and they do not like homes with in ground pools.