Rebuilding to buy a home

[Anonymous]

I'm currently in the midst of rebuilding my credit and looking to purchase in around 12-14 months. My score is bad now to due several collections. I can't pay them all in full but have enough to settle them all. Any specific lenders that wouldn't care about settlements showing? I would be using a VA loan if that matters.

[NC_Mtg_Loaner]

Collections that are settled showing a balance due of $0 are ideal.

Of course don't forget to be certain that you keep 2-3 accounts open (and managed properly) that actively report your on-time monthly payments to all 3 bureaus so that your score is optimized.

[VetMom]

As a 100% P&T disabled veteran/Federal disability retired (2014) who lost it all had to file bankruptcy in 2001 and all the compliments I've been getting on my financial decisions because I was so scared of losing everything again due to health has made the journey worth it!!! My broker said to me the other day while signing paperwork to start VA mortgage process "You didn't do what a lot of ppl do with your fear go all cash then have trouble buying a home!! You paid everything off fast even your SUV! All your scores are excellent(I got 3 preapprovals then went with broker who treated me like he took me seriously)!" My financial advisor (his broker friend dropped the ball then tried to snatch deal from my realtors friend AFTER she scored)has been begging me to buy for years because I'm exempt from property taxes but living around horrible neighbors at 2 moves made me pull the trigger to get some peace!!! This process has been much easier than I expected. I found my excellent realtor by accident inquiring about a 55+ restricted community ironically on VAs approval list but she found a nicer renovated penthouse I LOVE also on VA list!! My advisor told her go in low but she said no she offered full price asked for closing. Jul 1st they accepted our offer!! Inspection was Jul 8th. VA appraisal is Jul 17th. My lease ends August 31st so want to lay flooring before I move in. Beautiful hardwoods but I want all carpet GONE!

The moral of this story is to keep your eye on the prize!!! Discipline yourself. Good luck...

[VetMom]

Oh want a laugh? I ended up retired falling down GORGEOUS DC museum cobblestone steps in tourist vomit!! Drs are SHOCKED when they hear my story!! VA has taken very good care of me...now finish mortgage process!!! Hahaha

[VALoanMaster]

---

@Anonymous wrote:

I'm currently in the midst of rebuilding my credit and looking to purchase in around 12-14 months. My score is bad now to due several collections. I can't pay them all in full but have enough to settle them all. Any specific lenders that wouldn't care about settlements showing? I would be using a VA loan if that matters.

---

Hi Carlos936,

It doesn't matter if the collections report as settled or paid in full. The main thing is to get them taken care of so they stop reporting. As long as they report every month, your scores will struggle to improve.

Another reason to get your collections taken care of is a recent change to the VA guidelines now requires lenders to hit you for a payment on collection accounts if the CA reports a minimum payment on your credit report. Unfortunately a lot of CA report the balance owed as the minimum payment. 

I agree with  NC_Mtg_Loaner, make sure you have open & active accounts & that you manage them properly.