kt_scarlett007 wrote:
So, I'm doing everything I can to up my credit score which is not very good at the moment. I have an opportunity to buy a beautiful town home at a great price through my state's "Affordable Housing" laws, but after January 2009, I will be making too much a year to get the deal...luckily, once you qualify for the home with the program it's good for 6 months, raise or no raise. On top of that, there is a new law in place for first time home buyers that purchase through 2009 that allows them to get a $7500 tax CREDIT that can be paid back over 15 years. Nice. Anyway, my lender said he is confident if I get my score to just 620 I can qualify for a decent mortgage. Currently it is 574--(but it was 100 points LESS a year ago...so I'm making progress). It was a mess, but I'm paying off collections, paying bills on time every time, etc. I will not let this get me down...I hid from it before and it just plummeted, but not ever again! So, here is my question: I live in a downtown area of my city where I can get around easily without a car, so for the sake of saving money I just got rid of mine a couple years ago. Unfortunately, where I am moving to will REQUIRE a car to get around. If I get a car now and plan on getting a mortgage in 5 months how will this affect: A. My credit score and B. My ability to obtain a mortgage? Should I tough out not having a car until AFTER I sign my mortgage? Or can I safely get one now and be okay since it's still a few months down the road? HELP! Oh, and any tidbits on raising credit score are MUCH appreciated!! THANKS!
First off paying off your collections will not really help your scores in fact it can hurt them by making them look recent when you starting paying them off. There are a lot of loan programs like fha that dont require old charge offs to be paid. I would do a search in the general credit issues to learn more about pfd's. Basically call the companies you have charge offs with and ask if they will delete them off your credit report if you pay them. They dont have to but if they agree get it in writing before paying them and this will up your score
As far as the auto loan is concerned. Wait until your loan closes before going for one. Your score will get a hit with the inquiry, the loan amount will increase your dti at that time which will make what your elligible to afford/approved for lower.
