Help building credit to buy a house in a year

[fezwhy]

Long story short I tried a bank and a mortgage broker.  Both denied me on getting a house loan.    My scores are 623, 637, 655.  

I have a foreclosure on a first and second mortgage that will be discharged next summer. I have 8k in the bank and a family member that was willing to pay all my closing costs. Still they wouldn't approve me. I have no car payment or any other monthly debts owed.  The foreclosure was charged off in 2007.

One of the things they both said was I was high risk and only had 1 line of credit open.  I just have the 1 credit card.  I did cosign on a private student loan and that is in default as well.  However I haven't received anything from them on that yet but it was listed on my credit report I pulled.   My score was 760 before the foreclosure and dropped down to 450 after the foreclosure and private student loan went into default.

What can I do to boost my score?  

Apply for a New credit card, or secured loan?

How much can I expect my score to go up after my foreclosure falls off?

Lost and confused on where to go from here.

[StartingOver10]

I am not sure what you mean when you say "a first and second mortgage will be discharged next summer".  Discharged is more commonly used in a BK context. Do you mean that they will fall off of your credit reports next summer? Or do you mean you plan to file BK next year and expect the tradelines to be discharged in a BK?

As to the foreclosure: when was the deed transferred back to the bank?

[fezwhy]

No bk. The deed was transferred back to the bank in summer of 2007.

[klondike]

I guarantee no lender will pre approve you with student loans in default regardless of your score. Any potential collection that can result in being sued, will never be pre approved since they could come after the house or property.

Get your student loans in rehab asap and depending on your lender, your default status will reset and you will show current once your loan is resold.

[dzemboc77]

Sounds like your established credit is pretty limited / poor. You would think not having a car loan or any kind of loan is great because you have less debt but to the bank its actually bad. They like to see you have multiple loans, multiple credit cards all paid on time and being used from time to time. I would say your best bet is to get a few more credit cards although the more you app the more it will hurt your score. 

Just because you get a card doesn't mean u have to go into debt. I purchase my grocries with 1 card pay it off every month. Put gas on another ect.  Your scores are not too low although I think min now on avg is 640 medium score which you don't have. 

[fezwhy]

Yes that's why I am here.  So applying for a new credit card should be the next step then? 

I have never had a car loan I always pay cash.  I do charge gas twice a month on my 1 credit card though.

As for the student loan I cosigned and unfortunately have no communication with the person who took out the loan.  

[buildafico]

How much are student loans?
The bank isn't going to give you money if someone is gonna sue you for 20k and go after your house.

[fezwhy]

Around 7 or 8k. With interest they raised it to 28k. Those greedy debt collectors. Do I call sally mae and try to settle for say 7k or leave it alone and see if they offer me a lower settlement amount? I wish I had known the dangers of cosigning years ago.