Advice, please......

[Anonymous]

Hello everyone -

I am new to this board and have read so many posts, but I still don't know which direction to go first.  Here is my situation...

We were recently informed that the home we are renting will be sold and we will have to move.  I had never really considered buying a home until now.  I knew that my credit was not good, so I just kind of avoided the situation.  Stupid, I know.  But now I really want to take the needed steps.

On July 30, I pulled my credit score via a free 7 day trial through TransUnion.  It said my credit score was 631. That evening, I went to speak with a mortgage loan officer to see what could be done.  She pulled my credit report and these 3 scores came up:

Equifax - 585

TransUnion - 611 (According to the loan office, this is the score used and I need it to be at 620 to get an FHA loan)

Experian - 623

My first question is - why is there such a difference in the two TransUnion scores that were pulled the same day?  A 20 point difference sure seems like a lot.

My credit has several medical collections, many which I did not know about.  The loan officer suggested that I try to get them removed and if I couldn't, then I should pay them.  Since  I am motivated and want my score up above 620 ASAP, I contacted one of the collection agencies the very next day and tried to get them to remove them if I paid them.  They said no, so I just paid them (five collections for $423) and got a receipt.  Unfortunately, the loan officer did not tell my that this would actually reduce my score

I signed up for credit monitoring through Freecreditreport.com and it said my Experian was 586.  After I paid the collections, it went down to 578. 

I currently have a few more medical collections through a different agency ($168, $134, $123, $95, $93), a charge off for Applied Bank credit card ($487) and a charge off for First Premier Bank credit card ($289).  I have four school loans that are deferred.  Other than that, I have no revolving credit debt and no installment debt.  I have never been late on my rent and can get a house payment that is less than what I currently pay in rent.

What is the best plan of attack to get my credit score above 620 so that I can purchase a home?  I know this is not an overnight thing, but I am looking for the quickest way to get above 620. 

Do I pay the charge offs first?  Try to get the other collections removed (any suggestions on how to do that)? Open a secured credit card?

 I know that I put myself into this situation and I am not proud of it.  I just want to get out of this hole as quick as possible!  Any help would be greatly appreciated!   

Thanks,

Momma

[jamie123]

Okay...A few things.

All the scores you received except from the lender are called FAKOs because they are not real scores! The only place to get your real FICO scores is here at myFICO!

You have to work two different avenues to rebuilding your credit. Get rid of the baddies and add good credit.

You need to do whatever it takes to get those baddies off your report. Try DV, PFD and GW letters. They will be pulling your scores down until they are off your report. You REALLY need to have most of these removed! Read this forum there are many GREAT threads concerning the removal of baddies from reports. DO NOT PAY OFF ANY MORE COLLECTIONS UNLESS THEY AGREE TO DELETE THE INFORMATION FROM YOUR REPORT! Just paying off the collections does absolutely nothing for your scores. You need the bad information REMOVED.

You don't have enough good credit reporting. You need at least 3 credit cards to maximize your scores.

My suggestion would be to get 2 credit cards ASAP. My recommendation would be for a SECURED Capital One and a SECURED Bank of America credit card. Your scores are currently not high enough to be approved for a Walmart at this time but you really should try applying for it when your scores pass 640. Walmart is really good with credit line increases so don't worry about starting with a small credit line. You will also get a free TU FICO score when you sign up for electronic billing for the Walmart card.

Fund your SECURED BoA credit card with $500 to start. BoA will do a HP for any further credit line increases so don't mess around and just start at $500 and leave it there. It will take you 3 to 4 weeks from the day that you apply for the BoA card before you actually have it in hand. They are really slow in getting the secured cards out for some reason, I don't know why. They are also terrible in communicating if you have been approved for this card. You need to watch your checking account, they will withdraw your deposit about 3 days after you apply, that means you've been approved. This card will graduate into a UNSECURED credit card after you demonstrate 1 year of good credit behavior and they will give you your deposit back. At that point you will have an UNSECURED PRIME bank card which will open doors to other prime bank credit.

Same thing with the Capital One card except I think Cap1 allows you to start their secured cards with a $300 deposit. Cap1 secured cards will NEVER unsecure!

As soon as your scores hit 640 apply for a Walmart card.

You need to GENTLY use all your credit cards each month and pay them off in full SEVERAL days before the payment due date. Paying online works best for this.

Just by adding the 2 credit cards your scores should quickly climb above 640 but you still need to get the baddies removed. When it comes time to apply for a mortgage the lender will question you on every one of them that still remain on your report.

It is really not that difficult to do once you get started! Now's the time! You can do it!

Any questions?