topic Whats my next step? in Rebuilding Your Credit

Whats my next step?

amclaughlin42 — Tue, 28 Jul 2015 00:26:19 GMT

So me and my wife are needing to buy a house April 2016. We are wanting to keep it under 75K. We have about 5000 to put down by then. We do have few issues. We had to buy a new car this past year, the dealership stiffed us and it doesn't have A/C, we were wanting to refinance it, but the problem is, I have 43 inquiries on my credit report, well on my TU. I have 4 credit cards companies, and one cellular company, the rest are from shopping for a car, before I realized i was dead in terms of credit, I went two other dealers before we found out one that we got our car from, and they put 32 inquiries alone on my credit report. My wifes brother died right after we moved, so we had to use our credit cards and are paying them down now. It was sudden. but we will have both our cards paid down with the next month, our car payment is exceedingly high, $450 a month, we haven't been able to pay extra on our car payment, we had to save up to move for a couple months, and then with my BIL passed, and it was hard on us financially. My wife doesn't work and the only income she has is child support, which isn't much.

Once everything is paid off whats our next move?

Do I put more money down on my secured credit card to increase my line of credit?

I cannot pay off my car entirely before then. My payoff amount left is $18, 250.

My interest rate on my car is 22%, me and my wife want to get a new car is 3-4 years. Once its paid off.

I will have had 2 lines of credit open by Feburary 2016. My wife will have 1.

My wife has some collections. Her biggest one that is almost 1200 will fall off by January 2016.

As far as a mortgage goes, how much would we have to pay for closing costs? can we make extra money in payments towards closing?

Re: Whats my next step?

Relique — Tue, 28 Jul 2015 00:44:52 GMT

Some of the details aren't completely clear so I am sorry if I can't give you a more complete answer. But in regards to the credit inquiries, if you are shopping for car loan or mortages then all inquiries from a day count as one for scoring purposes. Here it is explained directly by Experian:

http://www.experian.com/blogs/ask-experian/2013/01/30/multiple-auto-loan-inquiries-count-as-only-one/

So the good news is that the car shopping inquiries would not hurt your score too much for home buying.

As for the credit related questions. It would be helpful to know how many accounts you have with what limits and if you know your current scores.. etc

Re: Whats my next step?

Anonymous — Tue, 28 Jul 2015 17:11:55 GMT

@amclaughlin42 wrote:
So me and my wife are needing to buy a house April 2016. We are wanting to keep it under 75K. We have about 5000 to put down by then. We do have few issues. We had to buy a new car this past year, the dealership stiffed us and it doesn't have A/C, we were wanting to refinance it, but the problem is, I have 43 inquiries on my credit report, well on my TU. I have 4 credit cards companies, and one cellular company, the rest are from shopping for a car, before I realized i was dead in terms of credit, I went two other dealers before we found out one that we got our car from, and they put 32 inquiries alone on my credit report. My wifes brother died right after we moved, so we had to use our credit cards and are paying them down now. It was sudden. but we will have both our cards paid down with the next month, our car payment is exceedingly high, $450 a month, we haven't been able to pay extra on our car payment, we had to save up to move for a couple months, and then with my BIL passed, and it was hard on us financially. My wife doesn't work and the only income she has is child support, which isn't much.

Once everything is paid off whats our next move? You need to establish 3 revolving lines of credit for each of you.
Do I put more money down on my secured credit card to increase my line of credit? No.
I cannot pay off my car entirely before then. My payoff amount left is $18, 250. What were your scores when you got the car, and what are your scores now?
My interest rate on my car is 22%, me and my wife want to get a new car is 3-4 years. Once its paid off.
I will have had 2 lines of credit open by Feburary 2016. My wife will have 1.

My wife has some collections. Her biggest one that is almost 1200 will fall off by January 2016.

As far as a mortgage goes, how much would we have to pay for closing costs? can we make extra money in payments towards closing? If you're "cash poor" after the down payment, you can make offers where you pay a little more over the asking price, and ask the seller to pay the closing costs.

Re: Whats my next step?

amclaughlin42 — Tue, 28 Jul 2015 18:58:23 GMT

We were told by the bank, that we needed 2 lines of credit but 3 was prefered.

I didn't have score before then. I had just started building credit. And on top of that experian still hasn't updated so I cannot check my 3B report and scores.

I am not even planning on my wife being on the loan, because it would do more harm then good. SInce she has a few collections and not enough open lines of credit.

Re: Whats my next step?

amclaughlin42 — Tue, 28 Jul 2015 18:59:41 GMT

@Relique wrote:
Some of the details aren't completely clear so I am sorry if I can't give you a more complete answer. But in regards to the credit inquiries, if you are shopping for car loan or mortages then all inquiries from a day count as one for scoring purposes. Here it is explained directly by Experian:

http://www.experian.com/blogs/ask-experian/2013/01/30/multiple-auto-loan-inquiries-count-as-only-one/

So the good news is that the car shopping inquiries would not hurt your score too much for home buying.

As for the credit related questions. It would be helpful to know how many accounts you have with what limits and if you know your current scores.. etc

We tried to go for a refi recently on my car, and we were told by the bank, that we had 43 inquiries on our credit and they couldn't help us.

Re: Whats my next step?

Bankrupt2019 — Tue, 28 Jul 2015 19:54:49 GMT

damn, 22% they took you for a ride, eh?

Re: Whats my next step?

amclaughlin42 — Tue, 28 Jul 2015 22:44:56 GMT

Yeah, but unfortunately it was that, or buy here pay here. And thats was only a last ditch effort.

Re: Whats my next step?

kennerchick — Tue, 28 Jul 2015 23:47:18 GMT

@amclaughlin42 wrote:

My wife has some collections. Her biggest one that is almost 1200 will fall off by January 2016.

Have your wife call the CRA's and ask for an Early Exclusion (EE) on her reports. TU may say yes. EQ and EX may or may not agree and may tell her to call back in October. If the rep she is are speaking with doesn't know what she's talking about, ask to speak with a supervisor.

Good Luck!

Re: Whats my next step?

Anonymous — Wed, 29 Jul 2015 00:21:37 GMT

To Me your next move should be getting your credit in good standings with a decent score for you and your wife. You might not be able to get a mortage in your case. If your wife could work, she should get a job cause two income are better than one and it could help with paying down and off bills. If your car apr is high Im sure your mortgage wouldnt be any better if you get one. No need to rush houses will be there when your credit is up to par. Have patience and and continue reading these blogs and getting understanding on how to do things. Youre in the right place for help for all of us were where you are one point in time. Stay strong and just work on your credit.

Re: Whats my next step?

J91605 — Wed, 29 Jul 2015 04:28:16 GMT

Yes, getting your credit in good standing should be your first priority. As you improve your credit you will be able to refi your vehicle for a better interest rate. Once you get to that point you will know your on your way to a home loan. Remember, if you were able to get a mortgage the rate would be so high you would probably pay for it 3 times on a 30yr loan. Be patient. Learn as must as you can from this board. Create a plan then follow it. Good luck with getting your first home.

Re: Whats my next step?

amclaughlin42 — Thu, 30 Jul 2015 02:25:27 GMT

Of Course getting our credit in good standing is important. But my wife getting a job is not something we want. We are aiming for a USDA loan. Not to mention, my wife is going through some medical things right now that make her If she were to work we would make too much money for that. My wife has a score of 540, which is about 60 points higher than it was a few months ago. Her credit it slowly rebuilding, I will definitely have her call about an EE. We didn't even know you could do that so that is helpful. I am not able to get my EX scores, once I can get thoses I will be ordering my 3B report. I only have CK scores at the moment. My wifes CK scores is about 60 points lower than her FICO. We are doing everything we can. But is it possible to be able to qualify for a home loan. My goal late Feburary/Early March is to have a score 680-720. But more like 720. The only thing truly affecting my scores right now are the inquiries which I can't really do anything about. Most of the inquiries were all in the same day or so

Re: Whats my next step?

MissCredit9 — Thu, 30 Jul 2015 06:03:44 GMT

@amclaughlin42 wrote:
Of Course getting our credit in good standing is important. But my wife getting a job is not something we want. We are aiming for a USDA loan. Not to mention, my wife is going through some medical things right now that make her If she were to work we would make too much money for that. My wife has a score of 540, which is about 60 points higher than it was a few months ago. Her credit it slowly rebuilding, I will definitely have her call about an EE. We didn't even know you could do that so that is helpful. I am not able to get my EX scores, once I can get thoses I will be ordering my 3B report. I only have CK scores at the moment. My wifes CK scores is about 60 points lower than her FICO. We are doing everything we can. But is it possible to be able to qualify for a home loan. My goal late Feburary/Early March is to have a score 680-720. But more like 720. The only thing truly affecting my scores right now are the inquiries which I can't really do anything about. Most of the inquiries were all in the same day or so

I would be very suprised if you got approved at that time. If you do the rate would be astronomical like your car. Could you at least wait until a few inquiries fall off? What is the rush if you don't mind me asking? Simply waiting one extra year could save you almost the price an entire extra house in your lifetime. There is alot of uncertainty in your case but one thing is for sure, if you end up getting screwed on the interest rate on your home like you did on the car you WILL regret it. And you won't be able to dig yourself out of that mess as easily as you could with the car.

Re: Whats my next step?

amclaughlin42 — Thu, 30 Jul 2015 15:57:22 GMT

Because me and my wife and our children need a place to live, we cant afford to rent a house that will accomodate us for another year, rent is sky rocketing, and where I live a house payment is much cheaper to rent a place. I cannot wait another. Me and my wife already put home buying off long enough. Its too risky not to buy a home.

Re: Whats my next step?

Anonymous — Thu, 30 Jul 2015 17:15:54 GMT

@amclaughlin42 wrote:
Because me and my wife and our children need a place to live, we cant afford to rent a house that will accomodate us for another year, rent is sky rocketing, and where I live a house payment is much cheaper to rent a place. I cannot wait another. Me and my wife already put home buying off long enough. Its too risky not to buy a home.

I would suggest going to a mortgage broker and having them do a lender pull and see EXACTLY where your mortgage scores are sitting. They will usually be happy to do it for you and it won't cost anything. They will also tell you what needs to be cleared or settled on your reports .You cannot rely on CK or anyplace else for accurate mortgage scores, unless you want to pay almost $60 for a 3 bureau report from here, or get the monitoring for $30.

Re: Whats my next step?

amclaughlin42 — Thu, 30 Jul 2015 20:09:55 GMT

My wife has the credit monitoring for her from here. And I am going to purchase it, but I have been forced to wait till they can pull my EX report. I was told they were unable to recieve any data for Experian when I tried to sign up for 3B Monitoring

Re: Whats my next step?

amclaughlin42 — Thu, 30 Jul 2015 21:11:09 GMT

I was able to get my 3B Scores and I have fair score. My mortgage scores stand as EQ:610 TU:629 EX is 629. I have read everywhere that after the hard inquiries are on my credit report for 12 months then they no longer affect my credit, a majority of my inquiries will be 12 months old by then