Specific Question to a prior Question - re: getting to 620 for a house

[Anonymous]

ok, I am at 528.  I asked about getting a house and those details are in another thread.  Basically, I have $50K of total debt.  I owe $30K on a 2010 Yukon and $20K in school loans.  I also own a lot worth $22K.  There were suggestions to sell the lot.

My question is why?  To take the $22K and pay off bills.  Will this increase my score drastically enough to get to 620 quick.  If so which ones.  The numerous school loans that total $20K or the Yukon...I would least have equity in the Yukon but never writing a check for those school loans again would be SWEET.

What is the purpose of selling the land BEFORE I am able to buy a house...it is the only real big equity I have.  I would do it if I thought it would make a HUGE impact but if not then I am toast.

[GoodCredBen]

I dont know if i would pay the student loans off, but i would pay the pickup down....

i am not entirely sure whether your Debt to Income ratio affects your score that much.... 

[Booner72]

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@Anonymous wrote:

ok, I am at 528.  I asked about getting a house and those details are in another thread.  Basically, I have $50K of total debt.  I owe $30K on a 2010 Yukon and $20K in school loans.  I also own a lot worth $22K.  There were suggestions to sell the lot.

My question is why?  To take the $22K and pay off bills.  Will this increase my score drastically enough to get to 620 quick.  If so which ones.  The numerous school loans that total $20K or the Yukon...I would least have equity in the Yukon but never writing a check for those school loans again would be SWEET.

What is the purpose of selling the land BEFORE I am able to buy a house...it is the only real big equity I have.  I would do it if I thought it would make a HUGE impact but if not then I am toast.

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Do you know why your score is so low?  Do you have outstanding debt that you need to pay other than the car and the student loans?  Paying off the truck or the car is likely not going to net you many points, if any, as they are installment loans.  We refi'd our vehicle last month, and when the old loan reported paid off, we didn't gain any points for that.

The only reason I can see to pay off the land BEFORE you buy a house is if you need to for DTI reasons (Or to use that money to pay off outstanding bad debt or revolving debt)- but if you own the land outright than that would not be the reason. 

[GoodCredBen]

not to mention that land could be worth alot more if you continue to hold onto it  

[Anonymous]

Score is low because I got way behind on student loans and credit cards this summer...120 Days Plus.  But even that can be worked out of with a couple of thousand and I sent payments off to bring credit cards to current and hopefully will have almost 100% availability by Christmas, and school loans will be caught up.  I was at 589 in March.

Just a ton of little things....my school loans were with CHASE and they were not consolidated, so I had 6-8 loans that went into collection.  I worked and got em out and after that US Direct Loans took em - they are late as of right now.

I am not behind on Yukon and land is mine.  That is my DP for house once I get this taken care of as, both neighbors have offered to buy it and the offer stands open.

[Booner72]

GW those lates and hopefully with time the impact will lessen in how much it is hurting your score.   You have to have 12 months of "clean credit" to qualify for a mortgage, so as soon as your score is up and 12 months has passed, you can apply and hopefully qualify.

My LO told me she could get me a loan at 620 but 640 "would be better."  It was at least 1 point lower w/ a 640 score, and less up front costs.  If you can, get to 640 and then apply.  I think you will be happier in the long run by waiting just a bit longer.  You will have the mortgage for many many years.  Your older self might be pretty ticked off at your younger self for diving into something when if you had waited, you would have been better off.

Good Luck!

[Anonymous]

Can I call all my "current" lates and try to work something to delete my lates if I make payments  in full to bring to current?

[Booner72]

It's certainly worth a shot.  In fact, it might work better than a GW because you are offering them money right now which they want.  If you can, get it in writing that you will pay X if they delete the lates.  But if you cant you should still get the account current, and stay current.  For your own sake.  Late fees/interest, etc.

[Booner72]

PS:  Beware - the credit card companies could and probably will, lower your credit limit once you get them paid down.  This is called "balance chasing"  - they do this so they don't risk losing any money if you end up not paying.  This could severely hurt your score bc it will make your utility at 100%.  But if you don't pay them and get current, you continue to damage your score by causing more lates, and putting off the 12 months of clean credit you need and want.