cancel
Showing results for 
Search instead for 
Did you mean: 

How long might it be?

tag
obmckenzie
New Member

How long might it be?

I'm trying to help out a friend who is really bad at computers/internet.

 

She's trying to purchase a new home. She knows her score is 572 and was told a 640 is required for an FHA loan. They estimate that by saving they can get to 10k for a downpayment by Feb 2014 and where planning on starting to look at that point witha deadline of August (schools)

 

2 years ago they had some trouble with their current home (which they won't be selling but will be renting but where told they can't count the rent as an income) and were 90 days late on a few other bills. Over the last 6 months they are current on everything and have made no late payments. She has no credit cards but her name is on the current house and car lease (ends in Nov when they are applying to purchase it). 

 

I'm trying to help her figure out how long it would take for her score to come up. I know its based on a lot of information but would it be even possible for a score to go from 572 to the 640 range in about 10-14 months?

Message 1 of 8
7 REPLIES 7
rckstrscott
Valued Contributor

Re: How long might it be?


@obmckenzie wrote:

I'm trying to help out a friend who is really bad at computers/internet.

 

She's trying to purchase a new home. She knows her score is 572 and was told a 640 is required for an FHA loan. They estimate that by saving they can get to 10k for a downpayment by Feb 2014 and where planning on starting to look at that point witha deadline of August (schools)

 

2 years ago they had some trouble with their current home (which they won't be selling but will be renting but where told they can't count the rent as an income) and were 90 days late on a few other bills. Over the last 6 months they are current on everything and have made no late payments. She has no credit cards but her name is on the current house and car lease (ends in Nov when they are applying to purchase it). 

 

I'm trying to help her figure out how long it would take for her score to come up. I know its based on a lot of information but would it be even possible for a score to go from 572 to the 640 range in about 10-14 months?


Welcome.

 

Couple things. First off, there are 3 FICO scores, not one, so she will need to know what all three reports/scores show.

 

She needs to get a secured credit card ASAP, as revolving credit and credit mix is important to bringing a FICO score up. With no revolving it will be hard. She should also start sending in letters to try to get as many of those lates removed from her credit report as possible. Lates are massive FICO destroyers.

 

640 is not the FHA scoring minimum, 580 is. 640 is ideal to start qualifying without additional conditions and to get the best FHA rate, but there are still lenders that will do loans at 580.

 

Your friend needs to keep ontime payments. FICO really puts heavy weight on the last 2 years of payments. The lender will require at minimum one year of on time payments on all accounts.

 

Another problem is her current home will be factored into her DTI, because she cannot qualify it as rental income.

 

-scott

Starting FICO Score: October 2010: TU 498 | EQ: 502
Current FICO Scores:: May 2022: TU: 784 | EQ: 770 | EX: 790
Message 2 of 8
obmckenzie
New Member

Re: How long might it be?

Thanks for the reply!

 

I think the 640 was what her lender told her, or the lender they went to that their realtor works with. I know its who they wanted to go with though.

 

I was able to get more information from her and she has 12 months with no late payments, and has nothing in collections. Prior (12+ months ago) to that she has about 4 accounts with several 30-120 days late spread out over about 2-4 years. Her length of credit history is something like 13 years.

 

She does not have any recolving credit just installment loans (Car, house, ect). I will urge her to get one. Dos the size of the available balance matter? I don't think could get a card with a huge balance, but maybe if she got one of those rebuilding credit cards, like you put $300 down and you have a limit of $300 would that be as effective.. especially is she didn't use it?

 

For sending the letters, I didn't think that was possible, but if it works that would probably greatly help. What are these letters called? I'd love to look up examples to provide her with some.

Message 3 of 8
rckstrscott
Valued Contributor

Re: How long might it be?


@obmckenzie wrote:

Thanks for the reply!

 

I think the 640 was what her lender told her, or the lender they went to that their realtor works with. I know its who they wanted to go with though.

 

I was able to get more information from her and she has 12 months with no late payments, and has nothing in collections. Prior (12+ months ago) to that she has about 4 accounts with several 30-120 days late spread out over about 2-4 years. Her length of credit history is something like 13 years.

 

She does not have any recolving credit just installment loans (Car, house, ect). I will urge her to get one. Dos the size of the available balance matter? I don't think could get a card with a huge balance, but maybe if she got one of those rebuilding credit cards, like you put $300 down and you have a limit of $300 would that be as effective.. especially is she didn't use it?

 

For sending the letters, I didn't think that was possible, but if it works that would probably greatly help. What are these letters called? I'd love to look up examples to provide her with some.


They are just called good will letters.. They are simply explainations or pleading letters asking for a gesture of good will. It happens all the time. Success ifs hit or miss, but there are stories all over about people having luck with those. Emailing CEOs, sending letters, faxing, whatever options are available. The worst is they can say no.

 

If her lender is requiring 640, she should look for a new lender if she cannot get to 640. Period. Cut and dry.

 

Now, she should be able to get a revolving secured card pretty easily, and balance doesn't really matter too much so long as the utilization on the card ALWAYS remains below 10 percent when it reports to the CRA's monthly. This is to make sure maximum FICO benefit for it is possible.

 

I didn't have the late payments, but I had 20+ colleciton accounts and scores  under 500 and I was able to get to 722 in 14 months. It is possible, I think if she got the secured card now, started working the good will letters, kept making on time payments, she would hit 640 by the time she needs to.

 

I would  by wayyyy more concerned with the DTI related to the current house; personally

 

-scott

Starting FICO Score: October 2010: TU 498 | EQ: 502
Current FICO Scores:: May 2022: TU: 784 | EQ: 770 | EX: 790
Message 4 of 8
obmckenzie
New Member

Re: How long might it be?

I would be as well but I think she believes there is nothing that can be done there. I believe they owe about 70-75k on the house and its only worth about 60-65k. The area they are in has a lot of houses that are being offered even lower at around 40-50k (10 houses in the immediate vicinity, 8 are forclosed at 35k and 2 are for sale at 49k). If the house was to even sell for what it's worth they would have to make up 10k which they need ofr the downpayment. 

 

I think thats why they can't really do anything about it, unless you might have some advice? I know they are going to attempt to rent it after some repairs are done, but I was told banks won't count the income from a rental and will only count it as a hit against their DTi.

 

Thanks again, I'm actually learning some tips for my credit.

Message 5 of 8
kitty9779
Regular Contributor

Re: How long might it be?

 

I didn't have the late payments, but I had 20+ colleciton accounts and scores  under 500 and I was able to get to 722 in 14 months. It is possible, I think if she got the secured card now, started working the good will letters, kept making on time payments, she would hit 640 by the time she needs to.

 

I would  by wayyyy more concerned with the DTI related to the current house; personally

 

-scott


WOW! Scott, can I just turn my credit reports over to you and let you take care of mine?? Smiley Happy That's amazing!!

Message 6 of 8
rckstrscott
Valued Contributor

Re: How long might it be?


@kitty9779 wrote:

 

I didn't have the late payments, but I had 20+ colleciton accounts and scores  under 500 and I was able to get to 722 in 14 months. It is possible, I think if she got the secured card now, started working the good will letters, kept making on time payments, she would hit 640 by the time she needs to.

 

I would  by wayyyy more concerned with the DTI related to the current house; personally

 

-scott


WOW! Scott, can I just turn my credit reports over to you and let you take care of mine?? Smiley Happy That's amazing!!


LOL

 

Well, I had a lot of success, but most of it was thanks to people on here like Guiness56, Booner72, llecs, RobertEG and a bunch of now long gone users and MODs.. I also had the ability to pay my debts down fast, which helped with the removal by GW process out a bit, and I spent hours a day working on it, either talking it out with the pro's here, or typing letters, faxing, email, scouring the web...

 

It just takes a lot of time to understand how to approach each debt/account, what gives you your best odds to remove an account.. and the the follow through to make it happen! Smiley Happy

 

scott

Starting FICO Score: October 2010: TU 498 | EQ: 502
Current FICO Scores:: May 2022: TU: 784 | EQ: 770 | EX: 790
Message 7 of 8
kitty9779
Regular Contributor

Re: How long might it be?

It has been very helpful for me that I have also had the ability to pay almost everything off. It's made it much easier to negotiate. There is one that I haven't paid because they won't work with me at all, and I'm sure I will eventually, but I'd like to try to get them to come to me. We're outside the SOL and it will be off of my CR in 6 months, so it would seem that they would want to me easier to work with.

Anyway, you've done a great job and I hope to have the same kind of success!!

Message 8 of 8
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.