Trying to rebuilt my credit from 510 to 600 for fha loan

[TOLENTINO03]

Secured card collections credit limit $400, bal $675 (2years old)
Voluntary repo collections $2,652 (2years old)
Medical collections $1,920 (3 years old)
Secured card $580 (1 year )
Medical collections $500 (2years old)
Care credit (disputed not mine) $487
Medical $397 (2year's old)
Speedy cash $315 (3 years old)
Att $219(4 years old)
Car repo (5 years ago) $14,396


I need help but do I pay these off to up my score??

[Anonymous]

my 2 cents.

have you talked to a loan originator for you home loan? Have them run you DU, this will tell them what accounts need to be paid off(of removed) and will likely tell them to disregard the medical collections.

[TOLENTINO03]

I did have a lender pull my credit but just told me that my middle score is 510 and all he could do is just tell me to seek credit counseling..

[Anonymous]

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@TOLENTINO03 wrote:
Secured card collections credit limit $400, bal $675 (2years old)
Voluntary repo collections $2,652 (2years old)
Medical collections $1,920 (3 years old)
Secured card $580 (1 year )
Medical collections $500 (2years old)
Care credit (disputed not mine) $487
Medical $397 (2year's old)
Speedy cash $315 (3 years old)
Att $219(4 years old)
Car repo (5 years ago) $14,396


I need help but do I pay these off to up my score??

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Are all of these items negative accounts? Do you have any current credit accounts?

[TOLENTINO03]

No current everything is in collections for about 2 years now or longer.

[StartingOver10]

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@TOLENTINO03 wrote:
I did have a lender pull my credit but just told me that my middle score is 510 and all he could do is just tell me to seek credit counseling..

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I can tell you this:  run far away from that lender.

A good loan officer will tell you specifically what you need to do to rebuild: which accounts to pay off etc,

In your case you have a few things going on that affect your approval with FHA:  

• If you have collections that total $2000 or more, they will want you to either pay off entirely or will attribute a payment amount of 5% of the outstanding balance toward your debt ratios. This can be a real issue for mortgage approvals as it will impact how much mortgage you can afford.
• When you are rebuilding you need to get rid of the baddies plus add accounts that are paid on time, every time for at least 12 months. This will help your score more than paying the baddies off. But you have to pay the baddies to get your mortgage. 

The amount you qualify for is mainly based on your income and your debt to income ratios (housing ratio and total debt ratio). See the mortgage forum for a more in depth explanation.  Having the collections increases your debt so it reduces the mortgage amount to allow you to pay for the debt.  Some lenders will accept a repayment agreement you have with those creditors as long as you can show the agreement + at least 3 months of payment on the agreement.