credit 620 for Mortgage Dec2016/Jan2017

[Anonymous]

Hi everyone,

I'm new here and hopefully can get some help.  What would you recommend to get my credit up from 607 to 620 in order to quailfy for a mortgage.

I have 2 medical collections unpaid. All other baddies paid or current. Most recent bad was a late car payment in Jan2016.  I only have a car payment and student loan on my credit as open accounts.  Should I open a credit card to boost my score.

Thank you.

[Anonymous]

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@Anonymous wrote:

Hi everyone,

I'm new here and hopefully can get some help.  What would you recommend to get my credit up from 607 to 620 in order to quailfy for a mortgage.

I have 2 medical collections unpaid. All other baddies paid or current. Most recent bad was a late car payment in Jan2016.  I only have a car payment and student loan on my credit as open accounts.  Should I open a credit card to boost my score.

Thank you.

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Are you already working with a lender?  I ask because I don't want you to be disappointed to get to 620 and realize you still aren't qualified for a mortgage.  620 is just a starting point for most FHA lenders.  They will also want to see 3 good trade lines open for at least 12 months.  To anwer your question, yes, you need to get a CC to get a 3rd line of credit, and to get a credit mix going.  You should post your info on the mortgage board as there are many knowledgeble folks there who can give you a realistic view of your mortgage chances.  In addition, you should look at the NACA morgage program.  It doesn't use credit scores and you may qualify for it more quickly.

[Anonymous]

I dont think much of what 2kids2cats said about credit scores for FHA is correct please take the time to read the rules/regulations for a FHA loan if you are already working with a broker then they will help you understand. The NACA advise is good advice.

[Anonymous]

Curious as to which part you think is incorrect? Are the stated FHA MINIMUM requirements less, yes. But good look finding a lender who will underwrite with a 620 and only 2 installment loans, neither of which are that old.

[Anonymous]

It's so easy to read a score requirement online and start thinking YES! I'm almost there! But that is rarely the full picture. I'm just encouraging the OP to fully understand the process before focusing on only one small part of the picture.

[Sbrooks1]

Agree 2 kids! People see that minimum 580 and think I'm a 601 so I am golden ! Unfortunately , that's not true. I'm at a 714 MMS right now with 18 accounts and all in good standing , no lates in almost 7 yrs. one late left a 30 day on a personal loan due to fall off in 3/17 and I am sweating a mortgage!!!! Also have 5% down saved plus closing

[Sbrooks1]

No lender in my area goes below min of 640 for FHA

[Anonymous]

When I was all starry eyed about getting a mortgage earlier in the year, I kept seeing ads from lenders who will "Approve with a 500!!", or other fantastic claims.  What they failed to mention was the only way for that to happen in 2016 is with a hard money loan----at double digit rates.  Improving credit is a long process.  While my scores are in the right range now, I still have too many negatives to obtain a good loan.  Am I going to wait until I"m in the upper 700s to get the lowest possible rate?  Probably not, I'm too antsy for that (Annnnnnd, I think there is a rat in my attic!  That alone is reason to flee the county immediately).  Getting a mortgage is way more than just a score.

[Sbrooks1]

I'm not waiting either until top of 700, I pray it's the right thing. As soon as my DP and closing are what I need I am pulling the trigger

[lily04]

Good afternoon!

I am a mortgage processor and this is what I deal with daily. It is true credit score is not the only determing factor. As for a recent late this year added on your report may raise red flags to some lenders. 

I work with a lender who does FHA with low fico scores but just going FHA itself its hard to get approved through plus recent deragotories.... 

I have succesfully closed a loan with many deragorties but all loans are case by case, there are so many factors that come into play.