I would realistically like to be purchasing a home in about a year. I am married with 9 year old and a baby on the way. I am the only source of income. My wife would work, but it would only cover daycare, that is if she worked full-time. She also has health complications that make working for her very difficult. I recently started my job about a month ago. However, I have worked on and off in the field since 2014. I lost my job in 2016. Mine and my wife's credit suffered badly due to this. My wife's credit was already trashed from her first husband who has criminal felony for idenity theft. I live in a small town where houses are considered affordable. My credit is still technically in repair mode.
Discover- $79/month Balance $2,914 - Was an account from prior to my 2016 job loss. Closed, but making payments.
Citi Bank - AU - Wife is main account holder. Reporting balance 152. Current balance 192. had to use when my wife was stuck recently in an emergency and her debit card wasn't working. So were going to pay it back down as much as possible.
Portfolio Recovery Associates - $50/month - balance $308. Expected pay off January 2020. Old Capital One card.
Student Loans $23K - Payments not currently being made. Due to income limits and family size.
I have a few closed accounts, that I cannot get deleted from my job loss in 2016. So I have to deal with them. As well as accounts I closed, and paid in full.
2 Medical collections for the same hospital. - totalling $248 - these are being put on the back burner, until I am done making payments to portfolio recovery.
BRU/TRU - I had a card with them, I don't know the balance, it was from my job loss. It disappear from my report so I don't really know what to do about it.
Target Red: I also had a card with them when I lost my job. Balance unknown, as it was also removed from my credit report.
Scores in the 620's accross the board
What do I need to do to prepare for a home loan, come september I will only have been back in my field for a year, after a 1 1/2 year break due to attempting to go back to school. My wife developed a heart condition and left her job so I had to unfortunated go back to support our family. But I was in that field for 2 consecutive years from 2014-2016. I feel like employment history would be the number one thing stopping me. My house is falling apart, which is why I can't wait. We rent. Landlord, wont fix anything. Our rent is very affordable, so I'd rather get out in the right way when we can, we just had to replace a toilet, and the floor around it so very weak, our roof leaks occasionally, the porch roof leaks anytime it rains. Its an old house, so there is also a floor furnace and it doesn't heat the house well, and there is window units which doesn't cool this old house well. So needless to say we need a new house. Anything before a year, just seems unrealistic. What steps do I need to take to achieve this goal. I know I'll need a down payment, and better scores. I have hopes this is possible.
I think you'll get some more good feedback shortly, but in the meantime--if at all possible, I'd open a credit card (even if it has to be Secured) in your name. Continue paying student loans as agreed and on-time, make sure the AU account is healthy (on time payments and utilization mgmt) and keep working on paying Open and Active accounts that can help you generate good credit history.
The Discover Card account, like your other collections-- although closed and you are making payments may be hurting you more than it should depending upon the data it's reporting---something you want to audit in my opinion. As long as you have made 4 regularly scheduled monthly payments on these accounts they can no longer report the accounts as derogatory/delinquent.
Other credit experts may correct me if I am wrong, but that's something you want to monitor. Unless I missed something though, what is missing most from your credit profile are open accounts that report you are making payments on time every month.
(basically, over time, you are going to replace the BAD history with your new, good history and you need to have open / active accounts to do so.)
Thank you for your reply. I read somewhere(I believe on myfico) that your mortgage score is based more on installment credit, instead of it being on revolving credit. Would it be more wise to take out a personal loan or auto loan? Because a new car is going to be needed, we are just trying to get our car as long as we can. We had 3 personal loans(1 was a refi) and an auto loan but they were a couple years ago and paid in full. When I lost my job they were top priority over revolving accounts, because I didn't want a repo on my credit. So that was top priority. So I didn't know if another more recent installment account would help. I haven't paid anything on my student loans due to my income level. But I can start paying something it on it, if that is a better decision.