I would get a secured CC to start building some positive credit.

 

I would pull your full credit reports from annualcreditreport.com (don't pay for scores!) so that you can see when the negatives will fall off.

 

You are saying the collections are 5 years old but how old are the other negatives?

 

It sounds like you need to think long term on getting your credit back to acceptable.

 

You typically need a mid fico score of 640 for a mortgage loan. Some lenders will do a 620 and only 1-2 in your area will do a 580. So you need to clean up your reports before you can get qualified for a mortgage loan.

I would try to PFD the collections and get 2-3 cards to build your credit. The only cards I think you can get right now are a secured card, or one from First Premier and Credit One but I would avoid them like the plague because their fees are unreal.

I think your best plan of action as far as credit cards go is to get a secured MasterCard from Capital One. Pay in full each month for 6 months and then apply for the unsecured Capital One Cash Rewards card for average credit. It has an annual fee of $39 but that pays for itself through the 1% cash back you get on every purchase plus you get 50% cash back on the total cash back you earned that year. I have had the card since July and I have gotten $97 of cash back on purchases I used to pay for with my debit card. I am waiting until it hits $200 and then I will request a check and deposit it into savings. I expect to get $300 in cash back this year total from my Cash Rewards card. I use it for gas, groceries, food, and 80% of my bills.