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FHA/Bad History/PreQualification

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FriendshipSoft
New Contributor

FHA/Bad History/PreQualification

Friends, have approximate 688 score with negative history from 6.5+ years ago.  Currently married and S/O has no debt and 760 CS.  We were preapproved for 650K FHA through a local lender and my income is $125K salary with bonus potentially to $155K while hers is 60K with yearly overtime to 80K.  So on paper $185 gross before bonuses/OT with approximation to top out at $230K plus.

 

We both have great employment history and approx 80K cash in the bank with approx. 170K in 401 that we will not touch.   I have 30K student loans approx. $375/month, she has none.   We have no car payments either, or revolving CC debt payments outside of my formerly poor history from almost 7 yrs. ago.

 

Should I let my negatives age off or address them in the next 1-3 months?  I am seeing my score dramatically increase due to age of credit history on my student loans which have not missed a payment since 2019 in addition to low revolving CL utilization 1-3%.  

 

We are trying to buy in this insane market and I am wondering if I should hold tight and let the process play out or if I should attack old potential collections/late payment history - had some bad family stuff years ago and finances were compromised.  I know there are no excuses here, looking for a path forward.

 

Thanks for any info!

Message 1 of 4
3 REPLIES 3
FriendshipSoft
New Contributor

Re: FHA/Bad History/PreQualification

Should I let my negatives age off or address them in the next 1-3 months?  I am seeing my score dramatically increase due to age of credit history on my student loans which have not missed a payment since 2019

 

Meant to say 2010*** when the loans became due.  No lates

Message 2 of 4
Adkins
Legendary Contributor

Re: FHA/Bad History/PreQualification

It depends, and I'd need more information to properly answer, so here are two answers for you:

 

Are the negatives updating to the CRAs every month? If they are, you can ask for an early exclusion from TU and EX (not EQ, they might do a month early but are known to be fickle). Or you can attempt a PFD with the creditors. A paid collection is better than an unpaid one. 

 

If the negatives aren't updating monthly, I would personally let them age off since you are looking to buy a house soon. The reason why is because if you try for an early exclusion and don't get it, the CRAs could update the debt with some activity on the account. The debt will then look newer to FICO, which costs more points (I've done EEs before and this hasn't happened when they got rejected but it's always a possibility.)


Last HP 08-07-2023



Message 3 of 4
SouthJamaica
Mega Contributor

Re: FHA/Bad History/PreQualification


@FriendshipSoft wrote:

Friends, have approximate 688 score with negative history from 6.5+ years ago.  Currently married and S/O has no debt and 760 CS.  We were preapproved for 650K FHA through a local lender and my income is $125K salary with bonus potentially to $155K while hers is 60K with yearly overtime to 80K.  So on paper $185 gross before bonuses/OT with approximation to top out at $230K plus.

 

We both have great employment history and approx 80K cash in the bank with approx. 170K in 401 that we will not touch.   I have 30K student loans approx. $375/month, she has none.   We have no car payments either, or revolving CC debt payments outside of my formerly poor history from almost 7 yrs. ago.

 

Should I let my negatives age off or address them in the next 1-3 months?  I am seeing my score dramatically increase due to age of credit history on my student loans which have not missed a payment since 2019 in addition to low revolving CL utilization 1-3%.  

 

We are trying to buy in this insane market and I am wondering if I should hold tight and let the process play out or if I should attack old potential collections/late payment history - had some bad family stuff years ago and finances were compromised.  I know there are no excuses here, looking for a path forward.

 

Thanks for any info!


You should "hold tight and lelt the process play out". Never want to upset the apple cart in the runup to a mortgage application.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 4 of 4
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