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Established Member
servin89
Posts: 10
Registered: ‎06-12-2013
0

Trying to Build My Credit

Hi, I am new to this site. I am trying to build my credit because my fiance and I are looking to buy a house is 4 months. I know I should have been started but I figure it is better late then never. I pulled my credit report from Experian today and this is what was listed:

 

Negative Items


Asset Acceptance - Status: Collection account. $899 past due as of Jun 2013.

 

Bank of America - Status: Closed. $833 written off

(Asset Acceptance is the collection company the bought this debt.)

 

CITI - Status: Account charged off. $0 written off. $985 past due as of Jun 2013.

 

RJM Acquisitions - Status: Collection account. $114 past due as of Jun 2013.

(I called them and asked about this account because to do not remember having debt with them and they told me they would close the account and to ignore the letter. Is there any else I need to do about this?)

 

Good Standing

AES/Bank of America - Student Loan

 

Bank of America/GLELSI - Student Loan

 

Federal Loan Service - Student Loan

 

I have not missed a student loan payment.

 

So what steps should I take to better my credit? Let me know if you have any suggestions.

Frequent Contributor
swtneka
Posts: 486
Registered: ‎02-14-2013
0

Re: Trying to Build My Credit

[ Edited ]

IMO those recent negatives are going to hold u back. I would start PFD immediately if your time frame is 4 months. What are the DOFD on them? Another big factor is what kind of loan are you going to apply for? FHA USDA conventional???? Some of the loan guidelines are not to have any recent 1-2 years collections.  Do u know your fico score?

Established Member
servin89
Posts: 10
Registered: ‎06-12-2013
0

Re: Trying to Build My Credit

How can i tell the DOFD on the accounts? And i am not sure what kind of loan we should apply for. My FICO score is 626.

Frequent Contributor
swtneka
Posts: 486
Registered: ‎02-14-2013
0

Re: Trying to Build My Credit

[ Edited ]

A 626 is a good starting number. Some lenders take 620 but most take 640+. I'm applying for USDA which is 0% down payment. I must have a 640 to get this loan and I think most FHA loans require 640 and 3.5% dp. I know conventional takes 620 but the dp is like 20% but that is some lenders and I think other factors are in it also.

 

You should go to annualreport.com and get all 3 of your CR and I believe EQ and EX will tell you the DOFD (date of first delinquency). This will play a big role in whether it needs to be paid or not cuz of SOL. Find out what your state sol is. If you have anything 12-24 months UW frown upon this and want it paid b4 they close on your deal. If your debt is over 1000 in whole they frown on this as well. Pull your reports see the dofd and when they plan to drop usually 7 years from reported or dofd (not sure) Im thinking reported cuz I have somethings that r due to fall off 8/9 years later from the dofd. Anyway pfd the most recent ones. Make sure u get it in writing.

 

RJM make sure you check next month to see if they removed. If it is still showing on your report send a dv to the CR that is reporting it. I am sure when you have that removed u could get a few points. I had a collection removed and I gained 19 points. U only need about 14 but I think that even with the 640 the UW will kick it back bc of the recent collections. I'd take care of that quick and I c u have no credit cards. I think I credit card might give u a boost. I got a cap1 and it gave me 7 point boost.

 

Im no expert i am just telling u what i would do. I hope someone with better experience comes and give u better advice.

Moderator
guiness56
Posts: 22,406
Registered: ‎01-17-2008
0

Re: Trying to Build My Credit

EQ is the only one that has the DoFD.  TU and EX have drop off dates.

 

Items fall off not later than 7.5 years from the DoFD.  If you have things longer than that something isn't right.

Established Member
servin89
Posts: 10
Registered: ‎06-12-2013
0

Re: Trying to Build My Credit

Thanks so much for your advice. Do you think it would be ok to get a credit card if I'm trying to get a mortgage ?
Moderator
guiness56
Posts: 22,406
Registered: ‎01-17-2008
0

Re: Trying to Build My Credit

Usually not a good idea to apply for any credit within 6 months of applying for a mortgage due to potential score drops due to inquiries and new credit reporting.

Frequent Contributor
swtneka
Posts: 486
Registered: ‎02-14-2013
0

Re: Trying to Build My Credit

I got my cc in Feb. and a lender was ok with accepting my app. I think that as long as it doesnt mess with your dti you will be ok. I think u can't apply for credit while u r in the loan process. Meaning u already applied and try to get new credit. U say u r 4 months out so I think u will be ok but it depends on the lenders cuz I have seen on here people saying to w8 12 months.

Frequent Contributor
swtneka
Posts: 486
Registered: ‎02-14-2013
0

Re: Trying to Build My Credit


guiness56 wrote:

Usually not a good idea to apply for any credit within 6 months of applying for a mortgage due to potential score drops due to inquiries and new credit reporting.


I have heard of this happening as well but it didnt happen to me. Everyone is different.

Moderator
guiness56
Posts: 22,406
Registered: ‎01-17-2008
0

Re: Trying to Build My Credit


swtneka wrote:

guiness56 wrote:

Usually not a good idea to apply for any credit within 6 months of applying for a mortgage due to potential score drops due to inquiries and new credit reporting.


I have heard of this happening as well but it didnt happen to me. Everyone is different.


Yes, they are.  That is why it is recommended not to apply for credit 6 months before a mortgage.

 

If in doubt, ask your lender their opinion.


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