New To Board Need to Rebuild To Buy Home March 2011

[Anonymous]

New to the board and newly committed to rebuilding my credit.

I have several credit issues I am on track to resolving. The major ones have been student loans. I recently got all of my loans back on a current payment status.

I have 3 collection accounts totaling about $200. I plan on paying these off.

What kind of score increase can I reasonably expect between now and January? Assuming I pay off the collection accounts and keep the student loans current?

I have been reading the boards and noticed that 620 seems to be the lowest score to secure a mortgage. I don't have any open credit cards, auto loans, or store cards. (I can't get approved for any)

Experian - 575

Transunion - 587

Equifax - 579

[JM-AM]

You need to take the idea of getting a mortgage out of the equation for now.

First you need to start fixing up all the negative information.

1 Collections that are not paid as of yet: If you have the money make an offer to PFD. If they agree you must get it in writing.

2 Collections that have been paid already: Try and GW them and ask for removal.

3 Late payments will stay on your record for 7 years since: Try and GW them, but being school loans may not be so easy.

You need to keep all your payments on track. No more late payments. 

Try and get a secured card for a CC. You will need to put your money up for this usually a minimum of $200. You can search the boards here for secured cards and decide which one you would like to apply for. 

Obtaining a mortgage would entail having 24 months of clean history. No unpaid collections. No BK. There are still a few lenders approving people with a 620 FICO score, but very few. The goal now is more in the range of 640 FICO score.

Paying off a collection will not change your scores any. If you and CA come to an agreement to PFD, that will give you a score boost. 

Keep in mind that rebuilding your credit does not happen over night. 

Good Luck

[RobertEG]

YOur current actions in getting back on track with payment of your current debts is commendable.  It might forgo any future damage to your credit score, such as the posting of a charge-off, collection, or legal action.  So that is the right path to take.

Be carful with those unpaid CAs.  If not past SOL, they may hit you with legal action.

But, as has been said, being current, or even paying off, debt, does not erase the prior delinquency history in your CR.  And that is what FICO scores.

You are on the right path for score rebuilding, but I dont see any significant score improvements in the next several months.

Keep pushing!