Trying to Improve Credit, Navy Federal Denial

[jasijou]

I am looking to buy the house I currently rent. Lease is up end of July. 

I did a pre-approval for Navy Federal and it out put my credit score as 619 and declined. When I called in to get the reasons for declining, the agent suggested that I fill out out the full application, rather than be deterred by the soft application. Since I'm self-employed, I thought submitting the full application, the LO would be able to give me a better overview of what I need to do to improve my application. My biggest concern, besides my credit score, is does my income and business history qualify me for a $400k mortgage. I put in a full application over the phone, no documents were requested or submitted. When I called 3 business days later to check the status, I was told I was declined and a LO would call me to go over my application. The LO was horrible, they asked why did I do an application with a low credit score. If I did basic research like her other members, I would know NFCU's minimum requirement is way above 620 and essentially nothing beyond my credit was reviewed. 

I was concerned that I would have different requirments since my proof of income would be bank statements and tax returns (I currently only have a K-1, no W2s). Then I get the denial letter today and my credit score is listed as 636. I read on the boards that NFCU has an appeal process. But that was never mentioned to me. 

Now to my credit. 

Experian 640 fico8/fico4 637

Transunion 632 fico8/fico4 619

Equifax 630 fico8/fico5 636

• Labcorp bill via CCS. Popped up January 2021. Was offered a settlement for PFD, but now they're saying they only PFD if I paid the full amount and there is no recourse. Labcorp was sending bill to wrong address. 
• Defaulted on federal loans in 2017, all were rehabbed as of July 2020. Tradelines still show. But there are dupilcate tradelines that are only reporting to Equifax. 
• $34,050 loan with USDeptofEd reporting to all 3 as CO Jul 2019. I have no record of this loan. Dept of ED, DMCS, FedLoan, et. al, also have no record of loan w/ the account number listed (or anywhere near this amount). FedLoan said they would email me a letter I can submit to CB, noting that all my loans are current. But is there anything else I can do to ensure a dispute goes thru?
• Paid off in full my Perkin Loan, February 2020. Shows as CO only for Equifax. 
• 3 private loans w/ Navient CO, thinking of doing a snowball payoff or 6month payment plan to pay off.
  • $14,415 balance/$10,000 original
  • $6,359 balance/$4,500 original
  • $12,359/$8,124 original
• I have a car loan with NFCU from Nov 2020. Pay twice/month.  $31,641 balance/$33,765 original
• Secured card with NFCU,  $121 balance /$2100 limit. Pay it off weekly. 
• Credit via PayPayl, utilization 0%

Is this just a matter of paying down the Navient loans?

[4sallypat]

My wife has student loans and all were sold multiple times to different banks which caused some lates years ago.

Navient & US Dept of Ed shows up as 3 line items but on time because she made a consolidated 0.5% payment agreement.

Still keeps us from getting a larger loan.

Our scores were in the mid 600s last year and this year thanks to an excellent mortgage broker, we were able to concentrate on the items that hits scores the hardest: revolving credit lines.

Now after a year, we are in the mid 700s and we qualified for $600K with a 3% APR, 3.5% down on conventional with no points.

Still the low end of the loan for a decent house in Southern California...

Try to find a good mortgage broker who will stick with you on improving  your credit profile.

[jasijou]

Thank you! After that horrible experience with NFCU, I reached out to two mortgage brokers, so hopeful they can work with me. 

I'm in South Carolina so I'm looking to get a $350k loan in the next 5 months. Trying to buy the house I currently rent in before it goes to market. 

[JVille]

You have some significant work to do. First go payoff the collection that will PFD and don't wait. Get that cleared off now.

then start unraveling the Student Loan trade lines. And get them reflected properly on your credit report. 
you need to go Line Item by Line Item and get it cleaned up.

[jasijou]

The collection was paid off a month ago. 

How do you unravel the tradeline? There's been other posts on this forum saying be careful about going after student loan tradelines. 

[bEncouraged1]

I was told that NFCU requires a minimum score of 660 across all 3 major bureaus to be considered.