Rebuild for mortgage

Anonymous · ‎06-02-2017

Hi guys been reading a lot since I signed up to my FICO and let me be the first to say thanks for everyone who helped me on my rebuild journey.my current scores are eq577,tran563,ex594. Mortgage scores eq507,trans575,ex549. Trying to get middle score up to at least a 640 by August if possible.

I have 2 collections both medical under 900 dollars. I have a Sprint collection that is paid off and due to be removed anyday now. I'm a au on amex cl of 2400 good standing no lates, au on discover with 2400 no lates both at 0 balances. have my own cap1 with secured card cl of 200 with a balance of $47 but is still showing a $8 balance on cr. All card accounts are less than 3 months old. I have a auto loan with GM financial that is now current. 12 30 day lates and worst status of auto loan is 60 day late back in October. The reason for the lates is when I first got vehicle my wife paid the first note but didn't pay correct amount $40 short which in terms made my payment a partial payment and the following month I still owed for previous month which made me 30 days late until I finally caught it. the Loan is 2 years old. I have a old cap1 card that was charged off and is settled. Have an old Kay's acoount that s charged off but doesn't show a balance. I filed bk back in 2013 and in now 4 years discharged. I have child support on my credit which has been current and paid on time for the past 3 years and it shows up as a installment loan. Other than that, that's all I have on my credit. Can some one please help achieve a 640 or better middle score. Is there anything else I can do to increase scores. Thanks in advance

gdale6 · ‎06-04-2017

@Anonymous wrote:
Hi guys been reading a lot since I signed up to my FICO and let me be the first to say thanks for everyone who helped me on my rebuild journey.my current scores are eq577,tran563,ex594. Mortgage scores eq507,trans575,ex549. Trying to get middle score up to at least a 640 by August if possible.
I have 2 collections both medical under 900 dollars. I have a Sprint collection that is paid off and due to be removed anyday now. I'm a au on amex cl of 2400 good standing no lates, au on discover with 2400 no lates both at 0 balances. have my own cap1 with secured card cl of 200 with a balance of $47 but is still showing a $8 balance on cr. All card accounts are less than 3 months old. I have a auto loan with GM financial that is now current. 12 30 day lates and worst status of auto loan is 60 day late back in October. The reason for the lates is when I first got vehicle my wife paid the first note but didn't pay correct amount $40 short which in terms made my payment a partial payment and the following month I still owed for previous month which made me 30 days late until I finally caught it. the Loan is 2 years old. I have a old cap1 card that was charged off and is settled. Have an old Kay's acoount that s charged off but doesn't show a balance. I filed bk back in 2013 and in now 4 years discharged. I have child support on my credit which has been current and paid on time for the past 3 years and it shows up as a installment loan. Other than that, that's all I have on my credit. Can some one please help achieve a 640 or better middle score. Is there anything else I can do to increase scores. Thanks in advance

Settle the medicals with PFDs will help some.

For unpaid medical debt that is reporting on your CR:

1. Call the OC and see if you qualify for Charity Care
2. If not then ask that they recall the collection in exchange for full payment
3. Send the reporting CA a PFD offer
4. Google the HIPAA Process and contact its creator for help

Anonymous · ‎06-04-2017

@Anonymous wrote:
Hi guys been reading a lot since I signed up to my FICO and let me be the first to say thanks for everyone who helped me on my rebuild journey.my current scores are eq577,tran563,ex594. Mortgage scores eq507,trans575,ex549. Trying to get middle score up to at least a 640 by August if possible.
I have 2 collections both medical under 900 dollars. I have a Sprint collection that is paid off and due to be removed anyday now. I'm a au on amex cl of 2400 good standing no lates, au on discover with 2400 no lates both at 0 balances. have my own cap1 with secured card cl of 200 with a balance of $47 but is still showing a $8 balance on cr. All card accounts are less than 3 months old. I have a auto loan with GM financial that is now current. 12 30 day lates and worst status of auto loan is 60 day late back in October. The reason for the lates is when I first got vehicle my wife paid the first note but didn't pay correct amount $40 short which in terms made my payment a partial payment and the following month I still owed for previous month which made me 30 days late until I finally caught it. the Loan is 2 years old. I have a old cap1 card that was charged off and is settled. Have an old Kay's acoount that s charged off but doesn't show a balance. I filed bk back in 2013 and in now 4 years discharged. I have child support on my credit which has been current and paid on time for the past 3 years and it shows up as a installment loan. Other than that, that's all I have on my credit. Can some one please help achieve a 640 or better middle score. Is there anything else I can do to increase scores. Thanks in advance

Outsideof the active collections...this (highlighted) is a biggie...have you tried contacting lender and asking for a "goodwill" removal of the lates? Really anything under 2 years is a big ding but a dozen 30Ds and 1 60D is a score killer. Your file is pretty thin too for "positives", Is there anyway you can hold off buying for a couple of years and let some of this age off? If it's possible you can wait, you could get a much better financing options and terms. I know it can be a daunting, but looking at what you said about your credit file since bk, you haven't really shown what lenders look for...and while being a AU with great limits/bal they don't really help in the mortgage game. You will also need a installment loan (CS isn't considered a loan when you go to underwriting), they have some great advice here (check out SSL on search) and some serious positive payment history.

Rebuilding is a great step to improve your life, but it's something that takes time (sometime years) to achieve. I know I didn't say what you probably wanted to hear, but hopefully you can look at what you need to do and buy you home in a couple of years with the confidence you got the best deal possible

Congrats on starting your rebuild and best of luck to you!

RobertEG · ‎06-04-2017

As stated by nevertoololdtolearn, mortgage lendors usually want to see an actual credit score that is unaffected by the account history of others, and may require removal of your AU accounts as an underwriting condition.

I would suggest chat with a prospective lendor as to their requriments, both as to having any AU accounts during the underwriting process, and any other requirements as to delinquent debt or lates within the past two years, etc. That will provide more specific, immediate targets that need addressing.

Anonymous · ‎06-05-2017

Congrats on your building towards a mortgage! I'm also building my scores as well while having a contract on a new construction house. If you want to read about my journey, I'm in the Understanding Your FICO Score section with the thread "What kind of score increase will I get?". I myself had a bunch of collections and two charge-off's and have been able to raise my mortgage scores 70-78 points between February-May 2017.

From my experience, our lender actually recommended that I get on my husband's credit card as an authorized user as a way to boost my score without having to apply for new credit. I would also suggest contacting your auto lender and asking for a goodwill adjustment of the 30-day lates. I think another red flag is that you have lates and collections after your bankruptcy.

I would also suggest posting in the Mortgage Loans forum. There are actual realtors and lenders in those threads that are really helpful.

Anonymous · ‎06-05-2017

Hi I thought I'd offer some encouragement because I started out with similar scores, in the low 500's, and went on to buy a home. The process took about 1 year to clean up my credit. My mid score when we purchased was 630, my husband's was 660. We had a VA loan and secured a 3.5% APR. So even with "average" scores we were still able to get a decent interest rate. Can you qualify for a FHA loan? They are also a bit more flexible with credit.

One big hurdle I can see is all your lates on the car loan. Our lender didn't care about the 2 medical collections we had, in fact he suggested we don't even contact them. He did include the amounts (about $1500 total) in our debt-to-income calculation. Our lender said we had to have 12 full months of on time payments across the board. This was probably our biggest wait, for the last late payment to age over a year. At that point, we had 12 months of on time car loan and CC payments showing. I agree with another poster about trying to contact the car loan for a goodwill delete on the lates. This is likely really hurting your scores.

Keeping your balances low on the credit cards will help your scores steadily raise each month. Seems like they've already gone up a bit, likely from the CC's. As they age, it will also help. I would not recommend opening any new cards or accounts right now since you already have quite a few new accounts.

With lower scores and more recent lates, do you have any compensating factors? For my husband and I, we had held the same job for 5+ years each and our debt to income ratio was around 20% with the mortgage loan, which really helped our case. Things like large down payment or good income can help counter balance not as great credit.

I would go ahead and dispute the Spring collection. If it is that old, there is a chance the collector won't bother to verify the info since it's about to fall off anyway, so you might get it removed a bit early. I would also dispute the Cap1 and Kays charge offs, to see what happens. When I disputed an old, paid charge off, it got removed from 2 of the 3 reporting agencies. Again I'm guessing since it was paid, the creditors just didn't want to deal with answering the dispute since they had their money anyway.

Lastly, have patience! That was the hardest part for me! I wanted my house NOW! It can be frustrating to have to wait months. But there is no super quick fix, and I have to say, after putting in the effort and then getting the house, we really felt really great about it, like we'd really earned it. If you make positive steps each month toward your credit and keep your CC usage small, you will see steady improvement. You'll get there!