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Cleaning up credit for FHA loan

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Anonymous
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Cleaning up credit for FHA loan

I am not even sure where to start on cleaning up my credit to hopefully qualify for an FHA loan here in the very short future. (we're living with inlaws and need out)

 

According to Credit Karma my scores are 635 on Transunion and 629 on Equifax. I also use the discover score card which tells my that my FICO score is 613 and I have 31% utilization but I have since paid down one of the cards.

 

I have one charge off that I am paying to the collection agency (through an attorney's office. Is that normal?) and a few other accounts in collections. My bigger concern is that one of the balances is $3,000+  for a dental surgery that I was pre-authorized for and paid my portion. The dental office billed incorrectly so I was told to have them rebill it. Once I contacted them I was under the impression it was taken care of. I told the collection agency this when I talked to them and for a while it was marked on my report as disputed but now it says meets FCRA requirements. The balance just keeps going up and up and I honestly have no intention to pay it unless I absolutely have to in order to get a home loan.

 

I have a few small-ish accounts in collections as well but those I can request a pay for deletion. My question is for that do you have to pay the full amount or offer something close?

 

From what I can see my scores fall within the range to get approved but I am worried about having a charge off along with those accounts in collections. Where should I start to make sure that I can get approved? Am I being too optimistic that this could happen so shortly?

Message 1 of 3
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Anonymous
Not applicable

Re: Cleaning up credit for FHA loan


@Anonymous wrote:

I am not even sure where to start on cleaning up my credit to hopefully qualify for an FHA loan here in the very short future. (we're living with inlaws and need out)

 

According to Credit Karma my scores are 635 on Transunion and 629 on Equifax. I also use the discover score card which tells my that my FICO score is 613 and I have 31% utilization but I have since paid down one of the cards.

 

I have one charge off that I am paying to the collection agency (through an attorney's office. Is that normal?) and a few other accounts in collections. My bigger concern is that one of the balances is $3,000+  for a dental surgery that I was pre-authorized for and paid my portion. The dental office billed incorrectly so I was told to have them rebill it. Once I contacted them I was under the impression it was taken care of. I told the collection agency this when I talked to them and for a while it was marked on my report as disputed but now it says meets FCRA requirements. The balance just keeps going up and up and I honestly have no intention to pay it unless I absolutely have to in order to get a home loan.

 

I have a few small-ish accounts in collections as well but those I can request a pay for deletion. My question is for that do you have to pay the full amount or offer something close?

 

From what I can see my scores fall within the range to get approved but I am worried about having a charge off along with those accounts in collections. Where should I start to make sure that I can get approved? Am I being too optimistic that this could happen so shortly?


First - ignore any score you get from CK. You need to get your mortgage scores - they will be different from your FICO 8 scores. You can purchase a 3 bureau report from MyFICO and get those scores. The only other way to ge them is to have a mortgage broker pull them and you will get an inquiry for that.

 

Was the medical bill ever paid by your insurance at all?

Message 2 of 3
Zizou615
Established Member

Re: Cleaning up credit for FHA loan

Recently learned the hard way to ignore Credit Karma scores in regard to mortgages--the Vantage scoring model is worthless.  When I applied for my mortgage, my lender score was more than 100 points lower than my CK score.  I would recommend getting your authentic score to figure out early what your chances genuinely are--instead of getting your hopes up too high right away.  Good luck!

Message 3 of 3
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