trying to raise bad credit scores for a home loan

[Anonymous]

I posted in the mortgage loan forum and was told to come here.

My husband want to by a house in the next year, and have crappy credit that we are just coming to terms with. We were both financial idiots from age 19 to 25. We are now 31 and 34, and are just now in the position to attack this. I have been reading through this forum a bit, trying to decipher all of the abbreviations and such.....it can be a bit overwhelming, so I decided to just jump in and post myself.

Anyway, my EQ is 494 and my husbands 597. We were actually able -- somehow -- to get a home we have lived in for 5 years. We are looking to purchase a larger home because I am 10 weeks pregnant with our 2nd child. I would like to try for an FHA loan, and it is my understanding we both need to get our scores to 620 before that can happen. What do I need to do, and how much can I improve my credit in 9 - 12 months? Keep in mind that since we have bad credit, we have stupid, high interest loans we pay on, so we are not able to pay large amounts on any one account.

Thanks for any information you have!

[llecs]

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

and What Steps Do I Take - great for learning the repair process.

First off, figure out where things are at now. If you haven't done so, pull your free reports from annualcreditreport.com for both you and your DH for all 3 reports. Those reports have info that others lack.

Next, know that you need to know your FICO scores. If you pulled your EQ from here or from Equifax.com, then be sure to also get your TU FICO reports from here too.

The links above will get you started. BTW, I wouldn't rush into a home purchase if, financially, you have little wriggle room in part due to those loans. While not a poart of FICO scoring, DTI is a big deal with lenders. The monthly obligations may put you outside acceptable limits for your DTI in a lender's eyes. I'd get aggressive and pay off as much as possible ASAP.