Understanding FICO® Scoring

[dixie229]

I have a good FICO score (795) and my new husband has a horrible score (around 550). He filed for bankruptcy about 2 years ago to get out from under huge medical bills, but has paid all bills on time since then.

How will his low score affect our mortgage rate when we look to buy a new home? Will we still be able to get a good mortgage rate?

[Tuscani]

You credit is 100% separate. Just keep him off of the application.

[DRASDALL]

This is probably not a problem.   If make more monthly income that your husband you will definately be fine.   If you are not currently employed, then it will be an issue, because they will use your husband's information only.   The main problem is that the rate will be a little higher and/or you may not qualify for a 100% program.

[Skiffy]

When are you applying? How much rebuilding will he be able to do by then? Would you qualify on only your own income?

[dixie229]

I have the main income (by just a little) and I have a house now, but we were wanting something larger. We're planning on moving within the next few months so there's not much time for him to rebuild credit. He's been working on rebuilding it for a while now, but isn't given much opportunity because of the bankruptcy. Right now he only has one credit card with a $300 limit, pays $50/year for it. He'll charge a couple things each month and pay it off when the bill comes due. Is there anything else he can do besides this?

Thanks for the input!

[Not_800]

Add him as an AU to one of your cards with a 0 balance

and a 10 year perfect history.

[Brammy]

A lender will probably offer you a home loan based on your income and score alone.  They probably won't touch him.  That means that you will be able to purchase a home that you could easily afford by yourself.  He will not be on the property deed or anything else.  That being said, for now, I would settle for the lower priced home.  Add him as AU as suggestd  aboove, give it 5 yrs to build equity andthen reapply jointly ifyou're readyto move on to bigger and better things.  If your one income can't support the house you'd like.  Still add him and take active steps to improve his score.  Once he hits 620 or above, thecombined scores and income may make you an A+ candidate.

[noni]

Brammy, my mortgage is in my name alone for the same reasons listed above. My husband is on the deed however. One doesn't have anything to do with the other.

[Brammy]

---

noni wrote:
Brammy, my mortgage is in my name alone for the same reasons listed above. My husband is on the deed however. One doesn't have anything to do with the other.

---

I'm not sure if that is a condition of the lender or state or what.  My Best Friend  has a BK on her record, her home loan was approved only with her husband's credit and she was not listed on the property deed for the same reasons.  I believe the bank would have trouble seizing property here if it were in any other name than the borrower because her a lender does not need to go to court to foreclose on your home.  Just a thought.

[Credit_Author]

Your mortgage will need to be based on your credit alone. When we have the situation where one has good credit and the spouse has bad we essentially ignore them. The downside is we also ignore their income so whatever you purchase, you need to be bale to qualify for it based solely on your income. The other option is to do a stated income loan, which shouldn't be a problem with your credit score. Lenders are getting more stringent however on stated income for salaried or hourly workers. Stated was designed for self employed borrowers but it's been grossly abused for the past couple of years.