01-20-2013 09:07 PM
I am owner financing a property from a family member. Two years ago I sold my home and bought this home . I had medical bills and fell behind on my payments many time so credit is not good . I did sell my home but the damage is done to my credit ,I don't have any payments as far as credit just old collections . All are more than 5 years old , but now I would like to get a loan for the house I am currently owner financing. I have some savings but do I pay off the collections or save it for down ? Do I get a secured credit card to build my credit? Help score is 585 Will I even be approved for a loan at that score?
Re: Owner financing
01-21-2013 06:43 AM
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.
Re: Owner financing
01-21-2013 09:19 AM
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.