Super n00b questions...considering buying in a year or so

[treski]

Hi everyone!

I'm a stay-at-home mom and my husband makes about $65k a year.  We have no debt as far as credit cards go, but he does have some medical collections that he paid to the CA a while back (before he met me).  He has never had credit cards, and so due to these collections, his credit is very poor.  My credit is a little stinky but fixable.  My myFico TU score is 609, EQ is 712, and EX from credit check is 569.  I know what's wrong and I've fixed these problems through the help of myFico forums before.  I can fix it.

I'm wondering:  Is there any shot that we could qualify in about a year or a year and a half?  He literally has no credit except for the collections, and what I have, I should be able to clean up to 700s across the board, but I make NO money.  Also, we're in the southern California market, which is not cheap, even now.

We have no savings.  Not because we couldn't if we tried, but because we suck at that stuff unless we have a goal.  I know.  I'm going to work on that dilligently.

I am a veteran and I will be able to secure a VA loan.

If you were me, and just starting to plan this all, where would you start?  What would your exact process be, from A to Z?  I've been a renter all of my life, but I'm pregnant with our third child and I want to become a homeowner, desperately.  We can be patient.  But a year and a half is about as patient as I'd like to be.

Thanks for any input.

[Familywantsahouse]

You have plenty of time. Your husband needs a couple of credit cards asap, they will have the be secured cards so you will need to put up a savings account which will equal the value of the credit limit. He needs to only use one of them between 1% and 9& of the credit limit each month.

You need to do "pay for deletions" for the medical collection accounts and get them OFF his report. you can usually negotiate a settlement for a percetage of what is woed if they are older accounts.

check out the rebuilding forums. tons of great info!

[treski]

2 of his medical collections I think I can PFD, but the others he paid, so it will be a learning curve for me as to how to get those off his reports.  I love the rebuilding forums and frequented them often several years ago, but SO MUCH has changed!!!  For instance, TrueCredit used to be the place to go for CR monitoring (now I'm with CreditCheck through USAA) and myFico used to be the place to go to get ALL true FICOs.  So weird.

Anyway, thanks for the encouragement.  I would like to know what anyone else thinks.  I had considered the seecured CCs for the hubby.  How many do you think are appropriate?  Any suggestions as to which ones (I know, I can probably check the rebuilding forums)?  Also, will the "new" lines of credit be harmful after a year?  I can't remember.  Would it be a good idea to get one for myself (I have no more active CCs)?

I also wanted to mention in addition to my previous post that we also own both of our cars outright.

That's all I can think of right now.

So step one...secured CCs...

Any other pointers?

Thanks!

[kjm79]

Some folks on the boards have posted about how they were able to obtain a secured peronsal loan from their banks (reports as an installment) and then they took the money from the loan and put it in a savings account to get a secured credit card.  Kills two types of credit with the same money.  The personal loan doesn't have to be big either, $1k or so, you will pay minimal interest but worth it to get two positive tradelines out of it.  For better scores you want/need that mix of credit.  Revolving/installment/maybe a store or gas card. 

The new accounts will probably hurt the AAoA a bit, but it's a necessary evil. 

I posted in the rebuilding forums last week about a free credit repair service offered to active and retired members of the military.  I haven't used the service but found it when I was doing some research on a VA loan lender.  Might be worth looking into.  I'm usually against repair services and think you can do it yourself, but since it's free and intended to help get people a mortgage, I shared the link. 

ETA:  Here's the link to the post I mentioned:

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Free-Credit-Repair-Advice-if-you-re-affiliate...

[casmith1980]

I would also suggest that any account DH opens, make sure they report to all 3 CBs.  It would suck to open an account, just to find out they only report to EQ, etc.

Good luck!!!!

[treski]

Thanks!

Also...I have heard that money you carry in a secured CC is counted toward your reserves.  Is this true?