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New Member
theBandit1984
Posts: 4
Registered: ‎06-28-2013

Rebuilding Credit and Looking to Buy a Home

Hi all,

 

I am approaching two years in my current job, averaging 120k per year, and my wife and I are ready to buy our first home.  When I left the military 4 years ago, I decided to have some fun but didn't get a job to pay for that fun.  All in all I ended up in a lot of financial trouble.  I went 150 past due on a CC that was CO, 180 days on a CC that was a CO, 60 days on another CC that was closed PIF, 90 days on three loans, and 60 days on a line of credit.  All of this was late 2010.  By March 2011, I was able to pay off all old debts, minus a judgment for unemployment overpayment, that I can PIF now.  When I was paying everything off, I had no idea you could get a PFD, but I am going to try GW letters to the companies. 

 

In September, I will have been employed for two years, so we will not be applying for any home loans until then.  More than likely, we will use Navy Federal for a VA loan.  I currently have 1 secured card with a $500 limit, opened in Nov 2011.  I was considering opening another secured card or increasing the limit on the 1 card to increase my available credit.  I don't know which is the better thing to do for my credit score or if I should do either with only a few months until we try for a home loan. 

 

My FICO scores are EX 631, EQ 641, and TU 657.  I don't know if I need to increase those scores to be approved for a loan. Aside from being nervous about jacking with my credit score now, I am also nervous about writing GW letters.  I attempted a few calls to the numbers on my credit report, but I had no success there.

 

Any advice is greatly appreciated!

 

 

Recovery Mode!

6/28/13 EX: 631 EQ: 641 TU: 657
Valued Contributor
rckstrscott
Posts: 2,659
Registered: ‎04-25-2011

Re: Rebuilding Credit and Looking to Buy a Home


theBandit1984 wrote:

Hi all,

 

I am approaching two years in my current job, averaging 120k per year, and my wife and I are ready to buy our first home.  When I left the military 4 years ago, I decided to have some fun but didn't get a job to pay for that fun.  All in all I ended up in a lot of financial trouble.  I went 150 past due on a CC that was CO, 180 days on a CC that was a CO, 60 days on another CC that was closed PIF, 90 days on three loans, and 60 days on a line of credit.  All of this was late 2010.  By March 2011, I was able to pay off all old debts, minus a judgment for unemployment overpayment, that I can PIF now.  When I was paying everything off, I had no idea you could get a PFD, but I am going to try GW letters to the companies. 

 

In September, I will have been employed for two years, so we will not be applying for any home loans until then.  More than likely, we will use Navy Federal for a VA loan.  I currently have 1 secured card with a $500 limit, opened in Nov 2011.  I was considering opening another secured card or increasing the limit on the 1 card to increase my available credit.  I don't know which is the better thing to do for my credit score or if I should do either with only a few months until we try for a home loan. 

 

My FICO scores are EX 631, EQ 641, and TU 657.  I don't know if I need to increase those scores to be approved for a loan. Aside from being nervous about jacking with my credit score now, I am also nervous about writing GW letters.  I attempted a few calls to the numbers on my credit report, but I had no success there.

 

Any advice is greatly appreciated!

 

 


GW letters are a great tool to try to get late payments or paid collection accounts removed. They are hit or miss, clearly, but you have nothing to lose to be honest.

 

I would check out the mortgage section when it comes to what is needed for approval for a VA loan -- your scores aren't too shabby considering those large lates from several years back, but if you can get some of those 120 day lates removed you'd be better off.

 

Do you have ANY other open trade lines? Just the one secured card? Do you carry a balance on that card currently? You will likely need to get a couple more active trade lines, but that will lower you AAoA and the inqs so you might take a little score hit at the start.

 

You should speak to a VA qualified loan officer so you can be prepared for what you need to do. I would assume it is more than doable.

 

-scott

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 05/12: TU: 722 | EQ: 712 | EX: 686
Collections Removed: Hunter Warfield, CBE Group, Merchants Credit Guide, EOS-CCA, Enhanced Recovery, Portfolio Recovery, UCB, American Collection Company, Medical Business Bureau, Jefferson Capital, Credit Portfolio Associates, FCO, LVNV, Convergent, Armor Systems
Other Negative Entries Removed:Plains Commerce CO, HSBC CO, 2008 Judgment Santander Reposession

Still Working On: Illinois Paid Tax Lien,
Positive Accounts:10/10: 0 | 07/12: 6 | Mortgage Closed 5/12, Macy's AMEX $3900, Citi/Home Depot $2000, Capital One Cash Rewards $1500, Capital One Secured $500, Credit One Bank $500. Total Utilization: 6%. AAoA: 1yr, 7mth. INQS: 8 TU, 8 EQ, 4 EX
New Member
theBandit1984
Posts: 4
Registered: ‎06-28-2013

Re: Rebuilding Credit and Looking to Buy a Home

Currently, I have the one secured card and a $500 line of credit through Navy Fed, and an auto loan as of right now.  We are carrying a small balance >$20 a month on the credit card.  I keep reading conflicting information about whether or not to pay it completely off every month.

 

Pretty much, it sounds like I should spring for a different secured card.

Recovery Mode!

6/28/13 EX: 631 EQ: 641 TU: 657
Valued Contributor
rckstrscott
Posts: 2,659
Registered: ‎04-25-2011

Re: Rebuilding Credit and Looking to Buy a Home


theBandit1984 wrote:

Currently, I have the one secured card and a $500 line of credit through Navy Fed, and an auto loan as of right now.  We are carrying a small balance >$20 a month on the credit card.  I keep reading conflicting information about whether or not to pay it completely off every month.

 

Pretty much, it sounds like I should spring for a different secured card.


Ya know, with the auto loan and the secured card, you will likely qualify already. If not, they may accept another form of credit, like a rental history or something along those lines. VA loans are notoriously flexible, and rightfully so, because of the flexibility our servicemen and women have shown for our country.

 

Usually, if you have not had any recent negatives (lates or collections in the last year), your scores are about 640 (it maybe be higher for VA, I am not too sure since I went FHA) you have 2 years on the job and you have a couple active trade lines, you should be gravy.

 

I think you should still work on repairing your credit the next 2 months while you wait for the job tenure to hit 2 years, but I personally feel you will be good to go.

 

-scott

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 05/12: TU: 722 | EQ: 712 | EX: 686
Collections Removed: Hunter Warfield, CBE Group, Merchants Credit Guide, EOS-CCA, Enhanced Recovery, Portfolio Recovery, UCB, American Collection Company, Medical Business Bureau, Jefferson Capital, Credit Portfolio Associates, FCO, LVNV, Convergent, Armor Systems
Other Negative Entries Removed:Plains Commerce CO, HSBC CO, 2008 Judgment Santander Reposession

Still Working On: Illinois Paid Tax Lien,
Positive Accounts:10/10: 0 | 07/12: 6 | Mortgage Closed 5/12, Macy's AMEX $3900, Citi/Home Depot $2000, Capital One Cash Rewards $1500, Capital One Secured $500, Credit One Bank $500. Total Utilization: 6%. AAoA: 1yr, 7mth. INQS: 8 TU, 8 EQ, 4 EX
New Member
theBandit1984
Posts: 4
Registered: ‎06-28-2013

Re: Rebuilding Credit and Looking to Buy a Home

Thanks, Scott.  I needed some positive news about the whole situation.  We have worked pretty hard so far and will continue to do so.

 

I'm looking forward to living in my house one day soon.

Recovery Mode!

6/28/13 EX: 631 EQ: 641 TU: 657
Valued Contributor
rckstrscott
Posts: 2,659
Registered: ‎04-25-2011

Re: Rebuilding Credit and Looking to Buy a Home


theBandit1984 wrote:

Thanks, Scott.  I needed some positive news about the whole situation.  We have worked pretty hard so far and will continue to do so.

 

I'm looking forward to living in my house one day soon.


I am not 100 percent on the facts relating to VA loan -- but I do know that your credit is not nearly as bad as you think, you have 3 active trade lines, no recent (recent meaning in the last year) negative accounrs, and the plausibilty factor of getting some of your negatives removed looks pretty good to me.

 

Everyones situation is different, and I know while in it, you might feel yours is hopeless or difficult. But I have seen many, many people with situations likes yours, or worse like mine was, turn it around real fast, esp if you have a good job, the eagerness to correct previous mistakes and the understand that comes with this whole process.

 

Feel positive about it, my friend. Your situation isn't as bleak as you feared.

 

-scott

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 05/12: TU: 722 | EQ: 712 | EX: 686
Collections Removed: Hunter Warfield, CBE Group, Merchants Credit Guide, EOS-CCA, Enhanced Recovery, Portfolio Recovery, UCB, American Collection Company, Medical Business Bureau, Jefferson Capital, Credit Portfolio Associates, FCO, LVNV, Convergent, Armor Systems
Other Negative Entries Removed:Plains Commerce CO, HSBC CO, 2008 Judgment Santander Reposession

Still Working On: Illinois Paid Tax Lien,
Positive Accounts:10/10: 0 | 07/12: 6 | Mortgage Closed 5/12, Macy's AMEX $3900, Citi/Home Depot $2000, Capital One Cash Rewards $1500, Capital One Secured $500, Credit One Bank $500. Total Utilization: 6%. AAoA: 1yr, 7mth. INQS: 8 TU, 8 EQ, 4 EX
New Member
theBandit1984
Posts: 4
Registered: ‎06-28-2013

Re: Rebuilding Credit and Looking to Buy a Home

I know it's been a few months since I started this thread but I wanted you to know that we did get approved and we are waiting on the VA appraisal before we can finally close.  Scott, I'd have to say that your posts were definitely encouraging.

 

Thanks

Recovery Mode!

6/28/13 EX: 631 EQ: 641 TU: 657
Valued Contributor
ezdriver
Posts: 1,365
Registered: ‎08-24-2013

Re: Rebuilding Credit and Looking to Buy a Home

[ Edited ]

theBandit1984 wrote:

I know it's been a few months since I started this thread but I wanted you to know that we did get approved and we are waiting on the VA appraisal before we can finally close.  Scott, I'd have to say that your posts were definitely encouraging.

 

Thanks


Congratulations ... and I'm glad that the encourage you found on this forum was helpful. When that house key is placed in your hands, it will give you a feeling like few other life events can give. Savor the moment and know that you earned it.

 

Thanks for yourservice ... from the dad of a US Marine.



Starting Score: 618
Scores on 10/9/13: EFX 652, XPN 669, TUC 662
Scores on 3/17/14: EFX 649, XPN 677, TUC 681
Goal Score: 720 ALL


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