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Mortgage and BK - thanks myfico forums!

noni
Established Member

Mortgage and BK - thanks myfico forums!

I put my house on the market last month an decided to take a hard look at my credit report to make sure everything was correct. I filed for BK in Nov 04 and I was fearing a terrible interest rate on a new home. In less than a month my middle score jumped from 652 to 682.

Thanks to all the wonderful advice from you folks here I qualified for a $200k mortgage with a rate of 6.5% from a prime lender! I am so excited I could kiss you all!

We got an offer on my house in less than 21 days so I am busy looking for my next dream home. The search is much easier now that I have that 6.5% in my back pocket.

Oh, and as an FYI my middle score dropped to 671 the day after two mortgage brokers ran my credit. I had two brokers compete for my business and glad I did. The first guy said the best he could offer me was 6.75%.

You peeps rule!
Message 1 of 10
9 REPLIES 9
dekrist
Regular Contributor

Re: Mortgage and BK - thanks myfico forums!

Congrats! Im trying to get home loan but i feel like im shooting myself in the foot, they want credit cleaned up, which i totally understand but the down side is cleaning up your credit lowers your score so will see what happens. Might have to put it off for a year and let credit marinate. Good to hear a success story though good luck to you.
Message 2 of 10
LadyFICO
Moderator Emeritus

Re: Mortgage and BK - thanks myfico forums!

Why do you think cleaning your credit would lower your score? Sometimes different variables temporarily lowers the score but then you get a boost as you continue to play by the rules. When are you considering the purchase? Depending on your credit profile I don't see why with planning, persistence and some patience why you can't be ready anywhere between 3-6 months.
 
Remember there isn't suppose to be a quick fix to the fico score. But inaccuracies, credit util and hx can boost the score in 3-6 months easy. My score went up 84 points on tu and 66 points since Feb 07. All a result of disputing info with collection agencies and an update of 1 paid down cc. I paid down 9 others that still haven't updated but I didn't pay them all down until mid april which is why they haven't updated yet. EQ did take a hit initially I lost 25 points and I have gained back 23. It hasn't reflected all of the collection accounts being deleted and none of the 10 cards I have paid down. You only require a 580/600 for financing though unless you are trying to get a good rate 620 and up you would still be house ready.
 
I hope some of this helps and know that you are not that far from home ownership.
Message 3 of 10
dekrist
Regular Contributor

Re: Mortgage and BK - thanks myfico forums!

I should have stated i took an initial hit on my score for paying which i understand, and given time i expect the score to rise. I have been disputing items and actually only have 1 left on TU to take care of, EX and EQ are a 2-3 away. I do see the rewards for my efforts for example my EX score was 580 its now 630. my TU was 613 now 597, EQ was 552 now 568. When my CC utilization gets down to 10% im sure my scores will jump higher. this and all the other variables should put me in better position for my home loan. I also have a judgement which i just paid couple of weeks ago and a related CA for the judgement plus one deletion of a Collection a payment of a collection and CC payment/balance which has yet to be updated. really anxious to see results for these.
 
 
Message 4 of 10
Brammy
Moderator Emeritus

Re: Mortgage and BK - thanks myfico forums!

Congratulations Noni!!
Message 5 of 10
noni
Established Member

Re: Mortgage and BK - thanks myfico forums!


@LadyFICO wrote:
Why do you think cleaning your credit would lower your score? Sometimes different variables temporarily lowers the score but then you get a boost as you continue to play by the rules. When are you considering the purchase? Depending on your credit profile I don't see why with planning, persistence and some patience why you can't be ready anywhere between 3-6 months.




In May of 06 my middle score was 620. I had contacted the CA to dispute several items at that time but it didn't do much to raise my scores. This year I became an authorized user on one of my husband's low util accounts, contacted the CA to update my employer information and make sure they had my phone number on record. I also disputed several of the same items again, only this time I was successful. Two of the accounts included in my BK listed 90 day past due in Nov 04. I filed Nov 2nd 04 and the creditors were first notified of my intent to file in Oct 04, so the should have stopped the clock in November. Now they state a 30 day late payment but none that are 90 days late. I guess that makes a big difference.

I am still waiting for TU to remove one name that is listed on my report that I have never used. They also list my current name as that of my previous marriage 7 years ago. They refuse to update it saying I have to contact all my creditors to have them change it. None of my creditors are in that name so there's nothing I can do. They don't need to remove the name from my report, since it was one of my aliases, but I'd rather they include my new name instead. I hate receiving letters from TU in my old name.

I am hoping to put an offer in on a place in the next week. I have to be out of this place in 30 days, so I have to move quick.
Message 6 of 10
LadyFICO
Moderator Emeritus

Re: Mortgage and BK - thanks myfico forums!

Congrats on getting ready to make an offer. I know it is a big step I have watched many friends go down that path. I am suppose to buy in the next couple of months and I live in an expensive area so a mortgage shouldn't be taken lightly. I hope to have my scores high enough to just get a 6%int rate.
Message 7 of 10
FicoDiva
New Visitor

Re: Collections Paid OFF....Now what????

Please help????How do you get a collection account deleted....????I paid off four and they only sent paid letters and my fico dropped by 54 points on Equifax and everytime a Mortgage company runs my credit I loose points. How do you obtain and get the deletion letter recognized?????
Message 8 of 10
devhip
Contributor

Re: Collections Paid OFF....Now what????

I would just go for the obvious...a good old-fashioned dispute with the CRA. In my experience, items that were stubborn and always verified can magically soften up once you've paid them. Once the creditor has your money and the account is settled their interest in bothering with you drops considerably. Some accounts will remain stubborn, but give it a shot. I don't know that contacting the CA matters at this point. For the same reason stated above, once they have your money they don't want to bother with you, let alone help you. So go with a dispute and quite possibly they won't even respond to the CRA which will get you a deletion.
Message 9 of 10
LadyFICO
Moderator Emeritus

Re: Collections Paid OFF....Now what????

Have you pulled your latest reports? I'm trying to figure out why the sudden 45 point drop unless they already took it into consideration or you have some other underlying things going on. Are you still remaining current on all financial obligations? Are there still more collections? Sometimes paying collections off temporarily decreases your score and then as you practice healthy fico behavior it rebounds over time. I know patience is key. 
Message 10 of 10
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