Journey to a Mortgage from Bad credit - UPDATE: APPROVED!!!!

[Anonymous]

Well here I am.  My credit is terrible.  I have been working on it the last month or so since my Wife and I want to buy a house soon.  I'm hoping for 6 months but that will probably be longer.  I had 2 First Premier Cards and 2 Capital One cards that had never missed a payment until this year.  Also, I had 2 Chase auto loans that had never missed a payment until this year.  My wife was ina  serious car accident and we had a lot of medical bills dumped on us and couldn't keep up.  Luckily, I stayed on top of my Cap1 cards for the most part and only have 1 30 day late.  First Premier didn't fare so well, both cards were closed by credit granter and charged off.  The Chase loan on my wifes car also has a balance from the difference of owed amount and what the insurance company gave us for a total loss.  

Here is what I am looking at

Collections ( I have alot)

First Premier Bank 1 - $477 - This has been paid and I am trying to negotiate a deletion

First Permier Bank 2 - $422 - Also paid and trying to delete

Fifth Third Bank card - $507 - Paid, older account and should be falling off report in next month or so.

Bureau of Med Econ - $223 - Paid in Full - Trying to get a deletion

CBE group  - $160 - Paid, also trying to get deletion, sounded promising on phone

Capital Accounts $384 - Paid - also trying to delete

RGS Financial - $145 - Agreed to do a PFD and will send email confirmation at which time I will pay - update - confirmed delete by email.  PAID. 

First Federal Credit Collections - $45 - Paid and agreed to PFD

First Federal Credit Collections - $60 - Paid and agreed to PFD

Allied Collections - $129 - Paid and agreed to PFD

Sprint (same as above) $255 - should hav never been on there and they agreed to delete.

Credit collections - Esurance - $120 - need to take care of

Chase - $1700 - left over from auto loan

Credit cards

Cap1 - $250 secured

Cap1 - $750 platinum

Target - $200

Using 100% of my credit right now.  Will be paying $600 of that down in next few days.

My other Chase auto loan has multiple 30 and 60 days late form this year...previous 2 years never missed a payment.  Will try to goodwill some lates off if possible. 

Thats pretty much it for my baddies, I also have a new car loan for my wife and it has never been late. 

My plan of attack as of now is to get the collections that have been paid removed if possible and pay the balances on my credit cards.   I will still have to pay Chase and esurance collection in future.  This will be an FHA loan so I just need to get above 600 with 620 as the target.

Scores FICO8

Trans - 523

Equifax - 545

Experian - 554

FICO Mortgage : 398

[JustinS]

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@Anonymous wrote:

Well here I am.  My credit is terrible.  I have been working on it the last month or so since my Wife and I want to buy a house soon.  I'm hoping for 6 months but that will probably be longer.  I had 2 First Premier Cards and 2 Capital One cards that had never missed a payment until this year.  Also, I had 2 Chase auto loans that had never missed a payment until this year.  My wife was ina  serious car accident and we had a lot of medical bills dumped on us and couldn't keep up.  Luckily, I stayed on top of my Cap1 cards for the most part and only have 1 30 day late.  First Premier didn't fare so well, both cards were closed by credit granter and charged off.  The Chase loan on my wifes car also has a balance from the difference of owed amount and what the insurance company gave us for a total loss.  

Here is what I am looking at

Collections ( I have alot)

First Premier Bank 1 - $477 - This has been paid and I am trying to negotiate a deletion

First Permier Bank 2 - $422 - Also paid and trying to delete

Fifth Third Bank card - $507 - Paid, older account and should be falling off report in next month or so.

Bureau of Med Econ - $223 - Paid in Full - Trying to get a deletion

CBE group  - $160 - Paid, also trying to get deletion, sounded promising on phone

Capital Accounts $384 - Paid - also trying to delete

RGS Financial - $145 - Agreed to do a PFD and will send email confirmation at which time I will pay

First Federal Credit Collections - $45 - Paid and agreed to PFD

First Federal Credit Collections - $60 - Paid and agreed to PFD

Allied Collections - $129 - Paid and agreed to PFD

Sprint (same as above) $255 - should hav never been on there and they agreed to delete.

Credit collections - Esurance - $120 - need to take care of

Chase - $1700 - left over from auto loan

Credit cards

Cap1 - $250 secured

Cap1 - $750 platinum

Target - $200

Using 100% of my credit right now.  Will be paying $600 of that down in next few days.

My other Chase auto loan has multiple 30 and 60 days late form this year...previous 2 years never missed a payment.  Will try to goodwill some lates off if possible. 

Thats pretty much it for my baddies, I also have a new car loan for my wife and it has never been late. 

My plan of attack as of now is to get the collections that have been paid removed if possible and pay the balances on my credit cards.   I will still have to pay Chase and esurance collection in future.  This will be an FHA loan so I just need to get above 600 with 620 as the target.

Scores

Trans - 523

Equifax - 545

Experian - 554

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Wish you the best in this stage. I unfortunately was in a similar position to you several years ago (got stuck out of work due to an injury for roughly 2yrs). Having recently been approved for a mortgage myself at really good rate(s) 3.375% apr over 30years: the focus needs to first be getting any/all collections paid off (PFD preferrably of course) and making sure you have paid letters for ALL derogatories on file and also get utilization down to at least 30% if possible. These are just my observations from all I went through mortgage wise. Keep in mind banks want to see at least 3 revolving TL's with positive history as well when app'ing (from what I've seen and been told).

Again best of luck keep banging away at any derogs as much as possible before the mortgage applications (try to get as much gone as possible) and you should be ok then hopefully.

EDIT: forgot to mention for me at least the magic number so to speak was 620 as the minimum floor FICO score wise. It may have since changed but there aren't many lenders if any who will approve for a mortgage below 620 score.

[Anonymous]

UPDATE :

Collections/ Chargoffs

First Premier Bank 1 - $477 - This has been paid and I am trying to negotiate a deletion - Tried goodwill but got denied.  Will keep trying

First Permier Bank 2 - $422 - Also paid and trying to delete - Same as above

Fifth Third Bank card - $507 - Paid, older account and should be falling off report in next month or so. - Still reports

Bureau of Med Econ - $223 - Paid in Full - Trying to get a deletion - Deleted from TU!! Waiting for others to report deletion hopefully

CBE group  - $160 - Paid, also trying to get deletion, sounded promising on phone - No Update

Capital Accounts $384 - Paid - also trying to delete - Removed from TU!!! Waiting on others

RGS Financial - $145 - Agreed to do a PFD and will send email confirmation at which time I will pay - update - confirmed delete by email.  PAID.  --Waiting for Deletion

First Federal Credit Collections - $45 - Paid and agreed to PFD - Deleted from TU! Others to follow

First Federal Credit Collections - $60 - Paid and agreed to PFD - Deleted From TU!

Allied Collections - $129 - Paid and agreed to PFD - Waiting for Deleteion

Sprint (same as above) $255 - should hav never been on there and they agreed to delete. - Waiting for Deletion

Credit collections - Esurance - $120 - need to take care of - Needs paid, will contact next week to negotiate PFD

Chase - $1700 - left over from auto loan - My last real headache.

So on TU this is what remains

Credit Collections - Still need to pay and Negotiate PFD.

Allied Collections - Agreed to PFD already.

Hopefully the others will be similar soon

Credit Karma which I know means nothing went from 505 to 534

FICO scores on this site have not changed except for Experian +1 pt

Still need to pay utilization down.

[Anonymous]

Just a bit of an update here.

First Premier Bank 1 - $477 - This has been paid and I am trying to negotiate a deletion - DELETED!!!!!

First Permier Bank 2 - $422 - Also paid and trying to delete - Trying to goodwill.

Fifth Third Bank card - $507 - Paid, older account and should be falling off report in next month or so. - Still reports - DOFD was November 2008 so it should fall off soon.

Bureau of Med Econ - $223 - Paid in Full - Trying to get a deletion - Deleted!!

CBE group  - $160 - Paid, also trying to get deletion, sounded promising on phone - DELETED!

Capital Accounts $384 - Paid - also trying to delete - DELETED!!

RGS Financial - $145 - Agreed to do a PFD and will send email confirmation at which time I will pay - update - confirmed delete by email.  PAID.  DELETED!!

First Federal Credit Collections - $45 - Paid and agreed to PFD - Deleted!!!

First Federal Credit Collections - $60 - Paid and agreed to PFD - Deleted!!!

Allied Collections - $129 - Paid and agreed to PFD - LAST COLLECTION THAT SHOULD BE DELETED SOON.  HAVE LETTER FROM CA

Sprint (same as above) $255 - should hav never been on there and they agreed to delete. DELETED!!

Credit collections - Esurance - $120 - need to take care of - DELETED!!!

Chase - $1700 - left over from auto loan - Being Paid $350 a month

I HAVE ONLY 1 COLLECTION ON ALL 3 REPORTS NOW

Credit Karma which I know means nothing went from 505 to 534 - UPDATE : 587

 Also, paid my ultiliztion down from 97% to 34% - Scores have not updated from balance changes.  By the time they report they will be below 25% as well.  Looking forward to a nice score increase.  Cards should report by beginning of March so I will update the scores then as well.

[Anonymous]

Congrats on a job well done!!!

[Anonymous]

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@Anonymous wrote:

Just a bit of an update here.

First Premier Bank 1 - $477 - This has been paid and I am trying to negotiate a deletion - DELETED!!!!!

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How did you manage this? I've failed miserably with a GW from them. 

[Anonymous]

H2 - I did 623a direct dispute with them and pointed out a couple discrepancies in the reportings. They wrote back that they would delete.

[Anonymous]

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@Anonymous wrote:
H2 - I did 623a direct dispute with them and pointed out a couple discrepancies in the reportings. They wrote back that they would delete.

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Dang. I tried that last week and got a letter back saying they are reporting correctly. Even tho they aren't. I'm at a loss with them. Glad you had success, even if I am envious!

BTW, did you mail or email your 623 letter? I did mine by email after a failed GW.  

[Anonymous]

I emailed mine.  Got a response back in about 3 days.

[Anonymous]

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@Anonymous wrote:

I emailed mine.  Got a response back in about 3 days.

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Same here, only their response to me was "We're reporting correctly, we won't delete".