I have a 505 credit score and would like to purchase a home within a year.

[caedy12]

I have a 505 credit score right now because of some old debts that unfortunately went into collection when my husband was laid off. It has been very difficult for me to get things paid off because of added fees, but I am slowly paying on them. I am hoping that I can raise my credit score to the minimum required for a mortgage because we are leasing my grandparent's house and we are hoping to purchase the house when our lease is up at the end of the year. We have now been renting the house for 2 years. My current debt to income ratio is 24/48 (calculated using my $800/month rent) and we will have about $20,000-$25,000 for a down payment ($10-$15k of this would be a gift of equity) on a $100,000 mortgage. I am just wondering if it seems possible for my credit score to be high enough by the end of the year, will the down payment help and what else I need to do to raise my credit score? I have also been at my current position for 9 consecutive years and we have a flawless rental history over the past 10 years (we could get letters of reference from all of them.) I am hoping that these will be considered positive factors when applying for the mortgage. We would be first-time home-buyers and so I also need to find out if it makes the most sense for us to apply for an FHA mortgage or another type of mortgage. I would appreciate any advice.

Thank you.

[dodfire]

You should provide the forum more information about your past credit history and what is on your report to get some good advice.

Unfortunatley your rental history and the cash you will be using for the down payment is not going to help what is listed on your credit report as far as your scores are concerned.

You should pull a current credit report and start working on whatever it is that has your scores so low.

I am sure there are many here that can assist you once you have some more information.