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credit score 520's and i want to purchase a house by november 2009

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credit score 520's and i want to purchase a house by november 2009

I am a 32 year old married woman looking to purchase my first home this year.  My husband and I have income of about 6000 monthly but have dismal credit scores.  My score is in 520's and i think his is even lower.  We really want to take advantage of 2009 stimulus, I just recently paid about 3500 of credit card debt and i have about 5000 more to pay on one credit card.   Is it going to be possible to secure a loan by november this year?
Message 1 of 7
6 REPLIES 6
New Contributor

Re: credit score 520's and i want to purchase a house by november 2009

I am not an expert, but I will give my opinion.  This will be very difficult to pull of by November 2009, although it may be possible.  I think that your only chance is to obviously pay off all the charges you owe to a zero balance and then I would go to your city and see if there are any non-profit organizations that work with first time home buyers.  They will meet with you and pull a trimerge record of your credit history and tell you what you need to do before you will qualify for FHA.  I am working with a non-profit it my city and they have been very helpful.
Message 2 of 7
Frequent Contributor

Re: credit score 520's and i want to purchase a house by november 2009

Most lenders are going to want a middle scrore of 620. If you are married, they will take the lower of your two middle scores I believe. Most lenders are also going to want nothing late in the last 12 months atleast.

 

In addition to paying past bills, you need to have some positive lines of credit. That will raise your scores but usually only after having them for 12 months or more.

Message 3 of 7
Frequent Contributor

Re: credit score 520's and i want to purchase a house by november 2009

If you pay that $5000 bal by nov, you may have a shot to hit 620 which could qualify you for va, fha, or usda if your report is free of any recent baddies that could raise eye brow. Low scores seem to react favorably to score increases when you pay down cc debts, atleast from my experience. I started at 510 and it didn't take me that long to hit 600 after paying down debts. Once i started going beyond mid 600s, it became more difficult to get those nice jumps. Hang in there, pay down the cc debts and you will be fine.
Message 4 of 7
Senior Contributor

Re: credit score 520's and i want to purchase a house by november 2009

One baddie inside of 12 months shouldn't be that much of a problem, although uw may want a letter of explanation.  If you're recovering from bk...that could be a big issue.

 

You're not giving us a lot of information to go on.  Do you have other cc with zero balances?  Do you have any collections?  Recent baddies? 

Message 5 of 7
Established Contributor

Re: credit score 520's and i want to purchase a house by november 2009

It sounds like there's something besides a maxed credit card bringing your scores down.  I would head over to the Rebuilding Your Credit board and post all your bad marks.  See what they suggest.  This will probably be your best bet as far as improving your scores by fall.
Message 6 of 7
Established Contributor

Re: credit score 520's and i want to purchase a house by november 2009

I also recommend going to the rebuilding board and posting more details regarding why your score is as low as it is.  There are a lot of things that could be done, depending on what is actually bringing your score down, and some are easier than others.  Everyone here will be very good at recommending the best course of action for increasing your scores.

 

As someone already mentioned, 620 should be your target as that will get you at least one step closer to qualifying for an FHA loan.  While the FHA loan itself does not have a minimum requirement, the lenders that actually fund the FHA loans typically use 620 as a minimum. In the past you could get one with a 580, but that has changed in the last couple months and it is now very hard to find a lender who still uses 580 as a minimum (the few that do remain will likely increase to 620 in the near future).

 

I wish you the best of luck.  It can be done, but it may not be easy!

Message 7 of 7
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