I hope I can explain this so it is clear. I have been rebuilding my credit while in my chapter 13 bankruptcy filed in August of 2005. It on track for discharge in December of 2008. So next Spring, I was planning to apply for an MSHDA (Michigan) and/or FHA backed mortgage to build a modest home (145,000)
Today I pull my my True Credit report and the Department of Education has changed my student loan reporting to show as Derogatory, Included in Wage Earner Plan. At this point, the balance on the loans is still showing although TransUnion has deleted all payment and balances etc. I disputed with Experian and Equifax to also change to zero balance.
Now, the lates were in 2002/2003 and because of this change from deferred to derogatory, not only did it tank my scores currently but it also means that they will come off my report in Oct of 2009 and in June of 2010.
How would a mortgage lender look at this information. This means I will have 6 total accounts as IIB on my credit report IF I apply next Spring.
I am hoping I can get my scores to recover prior to this as MSHDA requires a 620 score. (was at 650
)
So to the mortgage experts, should I wait until 2010 to apply or should I try to keep it going for next spring?
I am so bummed right now
(Have 11 positive tradelines since 2005)