@Anonymous wrote:
hello, my wife and I just went through an attempt (or 4) at obtaining home financing. we were promised the stars, then ignored when they could not deliver. we originally were going to stop, repair any credit problems, then come back down the road and try again if the first attempt did not work out...well, then the snakes came out, made lots of promises...17 inquiries later we gave up.
so, we are going to do what it takes to get ourselves in better position to buy. we both have ex-spouses that have contributed to our not-so-good credit scores, but have accepted our mistakes in trusting them, and are moving on...
I have a few questions I am hoping to have answered. my thoughts are that nobody here has anything to gain by helping me, so I think I should get some straight answers. I am to the point that I trust nobody in the lending industry, or the real estate industry for that matter....
so, question #1
I paid off $32 in student loans that were in default...was told that if I pay it off, then the loan would go through...good idea? wrong advise? will this increase my score, and how long will it take before I see a result?
2- I have seen here that the Orchard credit card (secured) will help? true?
3- we are in no hurry to buy a home now. my wife's car lease is up, and I was putting off trading my car in until after we closed on a home. I understand our credit scores will decrease if/when we buy new cars..how long before that negative impact is gone?
4- I have (on my credit report) past due child support payments. this amount came from arears that date back to 1993. it has long since been payed off, but neither myself, nor my exwife can do anything to convince the system that it is payed off. they say I still owe it. How badly is this hurting my scores? if I just pay it off, will my scores increase? and how long?
5- a realtor is helping us find a rental. she also works for a mortgage company that ahs a "credit repair" service within their office. she swears 3-4 months and she could get us financing for a home...I want to believe her, but have been lied to so much I find it hard...my low score is 591, I want at least a 620...
your help would very much be appreciated!
You asked for objectivity, so let me give you some of my first thoughts after reading your post.
Paying off defaulted loans may not help your FICO score, but it will be a plus when a loan officer is doing a manual review. Paying them off was the right thing to do. You can't get far with unpaid student loans. In time, you might try to see if they can be removed by writing a goodwill letter. I think that's difficult to do with student loans, but it couldn't hurt to try.
You ask about an Orchard credit card. Do you not have any credit cards? If not, then, yes, a credit card will help...IF you make small charges on it and pay it off before the statement even cuts. If you have done any reading on the credit card forum, you can get good advice on secured cards.
Now...an honest question...is there a reason you lease cars? Now...personal opinion...car leases can be expensive. You may want to consider driving preowned cars and saving the difference for a larger downpayment. A large(r) down payment can make a difference in a mortgage loan with a sketchy history. If it was me, I'd have my dollars go to down payment instead of to new cars.
Is the child support a large enough amount to fight? Or, is it more expedient to simply pay it off? I'm assuming you've disputed it on your credit reports? Have you talked to the agency that is reporting it? You may want to think about paying an attorney on this one. You'll have to weigh the financial pros and cons. If you pay it off, I don't know if there is a possibility to pay for delete?
Finally, don't be in a hurry for a home. If the first time buyer credit goes away, house prices will settle lower again. As for a rental? If your realtor has a rental that is a good deal for you that gives you some flexibility, fine. If not, look elsewhere. I would suggest that you NOT use their credit repair service. Also, don't feel when it is time to look again that you owe any loyalty to either the realtor or mortgage companies you have already dealt with. Clean slate.
I don't know if you've done much reading on the Rebuilding Your Credit forum. Those folks are great, and if you post the particulars on your child support problem there, I think you'll get some good advice.
Hang in there. And...the hardest part? Patience.
Give it time. It will happen.
