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New Member
melk1985
Posts: 2
Registered: ‎07-22-2013
0

Paying Judgement and Raising Score

We are very new to all the credit score stuff and I'm confused.

We have a few things on our credit, about 10 medical items that are all under 1k with most being under 300.  A phone bill and a gas bill that will both be paid in the next 3-4 months.  What is hurting us is a 10k judgement from four years ago.

We have two lines of credit right now, a small loan and a car loan.  Small loan is paid up with no late payments, car has been paid without late payments for the past 12 months.  No credit cards.

We are wanting to purchase a home but were told our credit score is not high enough to qualify for a FHA loan with 3.5% down.  My husbands score is in the low 540's.  I know the judgement needs to be paid before closing on a home but I'm a little confused....

The lender we are working with has told us that she is confident that we can get our score up above 580 and she is shooting for 620 in just 6 short months.  Is that even possible with paying the judgement and I think vacating it (is that even what you do with a judgement that is paid?).  We don't have credit cards to pay down to jump our score up so what do we do other than take care of the two items and the judgement?

We do not want to start building a home in hopes that our credit is above 580 because we just won't have the 10% to put down at closing if it's not.

Any advice on how to settle the judgement would be amazing as well.  We would like to settle for less, it's from a previous landlord and a very angry business partner (sick father, lost job, payment arrangements that the business partner did not agree to).  Hoping to settle for 5k.

How much should we expect our score to go up if we pay it and try to have it removed if that's even possible?  I need step by step instructions :-)

Senior Contributor
DaBears
Posts: 3,930
Registered: ‎10-26-2012
0

Re: Paying Judgement and Raising Score


melk1985 wrote:

We are very new to all the credit score stuff and I'm confused.

We have a few things on our credit, about 10 medical items that are all under 1k with most being under 300.  A phone bill and a gas bill that will both be paid in the next 3-4 months.  What is hurting us is a 10k judgement from four years ago.

We have two lines of credit right now, a small loan and a car loan.  Small loan is paid up with no late payments, car has been paid without late payments for the past 12 months.  No credit cards. Installment loans only account for 10% of Fico scoring. Getting a secured card will help. 

We are wanting to purchase a home but were told our credit score is not high enough to qualify for a FHA loan with 3.5% down.  My husbands score is in the low 540's.  I know the judgement needs to be paid before closing on a home but I'm a little confused....

The lender we are working with has told us that she is confident that we can get our score up above 580 and she is shooting for 620 in just 6 short months.  Is that even possible with paying the judgement and I think vacating it (is that even what you do with a judgement that is paid?).  We don't have credit cards to pay down to jump our score up so what do we do other than take care of the two items and the judgement?

We do not want to start building a home in hopes that our credit is above 580 because we just won't have the 10% to put down at closing if it's not.

Any advice on how to settle the judgement would be amazing as well.  We would like to settle for less, it's from a previous landlord and a very angry business partner (sick father, lost job, payment arrangements that the business partner did not agree to).  Hoping to settle for 5k. 

How much should we expect our score to go up if we pay it and try to have it removed if that's even possible?  I need step by step instructions :-) You will need to call your local court house and find out if judgements can be vacated once paid. I am not sure if they will vacated on a settled judgement. Varies from state to state. 


Hi melk1985 and welcome to the forums. It is possible to raise your score to 620 or even higher within the 6 months. How old are the medical collections? What state do you live in? and what's your state SOL (Statue of Limitations) very important to know. 

New Member
melk1985
Posts: 2
Registered: ‎07-22-2013
0

Re: Paying Judgement and Raising Score

I believe our SOL in Texas is 4 years if the articles I have read are updated.  None of the medical items are from the last year, most are from 2-6 years ago.

We were also told today that since we have a car repo 12 months ago, we have to wait another year to qualify for a loan.  We paid to have the car recovered, got a head in payments and have been current since.  It will be paid off next summer.  Is there any way around that?


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