Repairing credit to buy a house

[tealewis]

Looking for some advice on getting out of debt and buying a house. I have worked a ton of overtime lately and don't have a lot of debt. I will be able to pay off some little bills on the 1st of April leaving only my student loans after that. They total 15,000.

I have been working hard at budgeting and making extra money and that is going well. But the next step is overwhelming to me. My husband and I would like to buy our first house. I provide the sole income for our household and I have really bad credit, 507. Something I have only recently confronted. There are some recent and old collections mostly medical bills as well as paid for but charged off debt and a bankruptcy that will be removed from my credit on 1/2013. I have paid my student loans late on many occasions.

I am kicking myself for these past mistakes. But I am now my question is how should I attack this mess. Pay off old collections? Should I pay them in full or offer a settlement? Can you negotiate to have an old collections record removed if you offer to pay the debt in full? Save as much as possible or pay off my student loans? Get a secured credit card to rebuild credit? Should I start contributing to the 401k at work to improve my chances of getting a home loan? I need to know how to use my money as smart as possible to bring up my credit score while saving for a down payment. We want to buy a house as soon as possible but we figure 1/2013 may be the soonest we will be able to.

Also our plan is to work only on my credit as my husband provides no income, his credit is bad too, not as bad as mine. We are hoping to get the home loan only through myself, will this work?

[mauve]

There's a ton you can do.  Look at your reports, and prioritize the damage.  Figure out what your state's statute of limitations is on debt.  Opt out via optoutprescreen.com.  Evaluate the likelihood that any given creditor will sue you - if it's getting close to the statute of limitations and is a high amount, they may be more likely to sue you.  The items that are hurting your credit the most are the most recent ones.  You know you have a long process ahead of you, but you've taken the first step, and that's good.  If you haven't already, pull both your and your husband's reports from annualcreditreport.com and make sure you SAVE A COPY of each of them.  I recommend pdfing them and keeping a folder with all of your info in it to keep track of it.  For items within SoL, deal with them *when you have the amount in full* available.  Post individual items (group by creditor) here for advice on specific items.