VA Loans and possibility of rasing score in 12 months

[getting2work]

I just checked my fico score here for the first time in a long time. ( I was too scared to do so!) My husband and I have waged a financial battle over the last 10 years since he got out of the military and we had two kids. Long story short we are on the tail end of the battle since I am finally finishing up nursing school and we will have some great income. My FICO for exifax says 444 and transUnion is 565. Not sure why the disparity?

If my husband and I use our tax return to pay all collections and make our one car payment on time for the next 12 months, with no other adverse activity from this point on is it possible for us to get a VA or FHA loan? We already have the green qualification formthe VA.

[llecs]

Welcome to the Forums!

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getting2work wrote:

My FICO for exifax says 444 and transUnion is 565. Not sure why the disparity?

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Each of your (or his) credit reports will have different information by which FICO creates the calculation. There may be some accounts on one but not the others, for example. Even if you have the exact same accounts, your 3 scores can still vary. For example, a creditor may report an opened date on one but a different date on another. Or in some situations, maybe a creditor is reporting a credit limit on one but not the other (like my Macys special event acct. EX and EQ report a $2500 CL, but TU reports $0; thus this acct on TU always reads as a maxed out account, tanking my score, when it really isn't).

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getting2work wrote:

If my husband and I use our tax return to pay all collections and make our one car payment on time for the next 12 months.....

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Can't speak to the FHA (you may want to aim for a min. of 600 on all three), but paying off a CA (collection agency) will NOT improve your score. In fact, it may tank your score even further. Read over in the Rebuilding Your Credit Board for details, but a $0 balance reported by a CA is just as bad as a $10,000 balance due in FICO's eyes. Some CAs will actually update the account causing FICO to read it as new leading to a further score drop. If past SOL, or if your have the $$$ to PIF, then start with a DV. If they respond to your liking, then offer a PFD to get the baddie removed.

[getting2work]

Wow! I had no idea there was no difference in paid or unpaid as far as affecting the credit score. I am so glad I checked with you. We may have spent a few grand for no benefit in the score. The SOL is up for the worst few. I am going to research the thread that you recommended. Our dream is to finally buy a home. We are prepared to get to work and do whatever it takes. Once I graduate I our combined income will be over 100k and and out DTI will be very low so at least we have that in our favor. We just need to get some good history with no lates. I hope 12 months will be enough to make an impact. I will do as you say regarding the other. This is such a great forum!