Chances of getting a mortgage in a years time..

[CreditInspired]

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@avigeant83 wrote:

I have 4 open credit cards at the moment with good payments for the last 10 months. I got secured credit cards and one of them was unsecured. I even got a credit increase on two of them just recently. So I've been showing a healthy track record of making payments. My score was in the high 400's to low 500's this time last year and I'm hovering around 600 just based on those credit cards. So if im making a payment plan on a few of the repos/evictions, I'll be elgible for a mortgage or would they need to be paid in full? That's a lot of cash to fork over in a years time but I'm more than willing to start making payments on them. I did call a few of them to do pay for delete and none of them said they're allowed to do that. I have a lot of charge offs that are going to expire in 2020, around the same time I plan on purchasing a home. I feel that I should just let them die off and focus on the newer ones. Thoughts?

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As long as you have an established payment plan, the monthly payments will be included in your DTI (debt to income ratio) the same as monthly payments made on your credit cards.  So, of course, the goal would be to have the minimum payments set as low as possible. 

Now while we’re on this subject,

please list your credit cards (name), the credit limit, and the minimim monthly payments. Also, are there any student loans?  Another thing a lender will want to know is if your income is salaried or self-employment?

I know this is a lot of stuff coming at you but at least you’ll be armed with the info when you do decide to take the plunge toward getting a mortgage. 

[avigeant83]

The list of credit cards that I do have at the moment...

Capital One $500 limit (8 months old)

Capital One $300 limit (6 months old)

Credit One $300 limit (9 months old)

First Premier $400 limit (10 months old)

Indigo Mastercard $400 limit (6 months old)

First Access $300 limit (10 months old)

I know that it's a lot small credit cards and limits, but a few were secured and the rest were the only ones that I was able to obtain. I just owe 200 on them altogether. I just use each card for my netflix, hbogo, myfico monitoring, etc. Each one has a bill of 10-20 a month, then I just pay them off. So I'm in no debt with credit cards. I don't have any student loans, I paid that off a few years back. My car is under my gfs name so it's not on my credit report. The only bills I have are the credit cards which I barely use, they are just there to build credit history up again.

So the best idea is to set up payment plans with the bigger items but that would take a few years in itself to pay off, but if I have an established plan to pay them off then a lender might take a bite with me? I can let the little ones go for now and age out, set up plans with the evictions/auto for 50 cents on the dollar? That should be my goal?

[Anonymous]

My advice for the charge off accounts is to verify which ones are being calculated in your credit utilization, as this is 35% of your score, and pay them first! Others may argue against this but from personal experience by not paying a charge off that is calculating in your overall credit utilization it will be impossible for you to receive the maximum benefit once you start trying to rebuild your credit with other credit cards. Once paid, start working on your collection accounts via the PFD method.

To verify which charge offs are being calculated in your utilization look at your 3B report > All Accounts, then filter for revolving/open ended. Go through each and the ones not reporting a zero balance are being included.