So I found these boards in December 2013. I recently moved in with family in order to save money, repair credit, and hopefully get an FHA loan for a duplex or triplex that I live in while renting out the other unit(s). Starting with a 559 from TU, I Paid off 4/5 collections in full at the beginning of January, then filed an online dispute with Transunion in February to have the items updated. Two of them I wanted to show as paid, and the other two I managed to gain agreement that they would be removed completely. About a week ago, my TU dispute completed and they actually removed all 4 items completely! Not just paid, but removed! My first success!
I applied for a Cap One secured card. Put $600 on it, and added another $400 a week ago. I also applied for a First One Progress secured card a few days ago (denied for BOFA), and I submitted $2000 on that card, just need to verify my identity tomorrow before they send the card. So two secured cards, $1000 and $2000. Due to reviews and graduating etc I now wish I'd sent the 2k to Cap One and the 1k to First One Progress, but what's done is done (maybe they'll let me change it when I call to verify tomorrow). Anyway, I figured if I put more money on the secured cards, I may get higher credit limits when I start applying for unsecured cards, plus, I can always close one of the accounts if I really need the money (I realize that's not ideal, and I don't expect to need to do so, at least not until I'm needing the money for the FHA downpayment, if even then at all). I also figured with higher limits, I could keep my utilization lower, while using the cards for monthly bills and food and things like that. Living with my family now I have very little expenses, it's basically phone bill, auto insurance, gas and food... not much at all getting in the way of repairing my credit situation and saving money for a downpayment.
So I've got one collection for $100 left (medical bill from 2009 before I had medical insurance, that wasn't paid), and a $25 one I found on my experian report the other day, (also 2009 and I've no clue what it's for at this point). My score today is 598 (TU), I'm thrilled to see that jump from 559 in just about two months of effort. I imagine when I pay those two and/or have them removed, combined with adding and making a payment on the First Progress card... it will jump closer to the 620 I need to be eligible for an FHA situation?
Also, I had about $10k in defaulted student loans that are now paid in full (and show as such on the reports, paid, but defaulted). According to TU, these will fall off 08/2014. If I can get the last two collections for $125 paid and/or removed soon, and the defaulted loans fall off later this year, that leaves no negative information, and two new accounts showing on time payments for the secured cards.
My questions for anyone who can help:
Firstly, should I apply for a 3rd secured card? Is it actually better for me to put another 1k or 2k on the 3rd card or is it just fine to have a $500 limit? Am I ok with the two I have now and no need for a 3rd?
Secondly, should I avoid applying for the FHA loan before August if my score reaches that 620 minimum in the next month or two? Should I be waiting a full year to show I've paid my secured cards on time with low utilization? Or should I go after the FHA loan in the next few months if my score goes above 620? I basically have the downpayment at this point, or will have it in full pretty soon - but I'm wondering if it's more a matter of time passing showing I'm paying on the secured cards - as opposed to having a 620 and the downpayment.
