I echo what the first responder said. You can get home loans with 0%-3% down, so a down payment isn't as important as the debt. The higher debt could not only prevent an approval, but lead to significantly higher interest rates.
I was in the same boat as you and took this approach, nearing the end. I negotiated a lot of PFDs and happily paid them in exchange for removal, and just about have it all cleaned up now.
Best of luck!
I don't mean to be harsh, and I do realize that tightness of your current living quarters, but at this time, buying I don't think would be cheaper than renting. With your credit scores as they are now, Pursell1911 was right - no leaner would touch you. And as a rule of thumb, you need a minimum credit score of 640 before any lender would talk with you about a mortgage.
Credit scores affect so much in your life - all insurance rates/premiums are based in good part on your credit score. So with buying a house, and a credit score on the lower end, your homeowner's insurance will cost more.
And with a down payment of less than 20%, most mortgages will require you to buy monthly PMI.
So the higher cost homeowner's insurance, coupled with the probable required PMI + not being able to get a desireable mortage rate with a lower end score - to me - just seems prohibitively expensive.
But even forgetting about your need for a house, you have simply got to have an emergency fund (especially with a family of your size). With no cushion against the happenstances of life, making progress becomes even more of a challenge - if not an impossibility - because life is guaranteed to happen. You have to have an emergency fund cushion.
You could build both a cushion and paying down your debt at the same time - that is what I would do. As I mentioned, a credit counseler (not a debt consolidator) would be of immense help to you. A budget is more involved than cash for gas and groceries. There needs to be a slice for each debt pay-down, as well as for your emergency fund cushion.
Once these two things are done, then you begin throwing money ferociously at your down payment for a house - and you will be in a much better situation to get one.
Again, I wish you the very best of luck!
Just wanted to update. I was successful in getting both CreditOne charge offs removed from the credit bureaus!! I have renewed hope in getting some of the other baddies removed.
That's awesome, keep it going!
I am in the process of a massive paydown/credit score improvement plan with the end goal of purchasing a home.
I suggest that when you post updates, copy and update your the table from your original spreadsheet every 30 days or so.
Its awesome to see the balances going down, collections disappearing, and the scores going up.
Also, you might want to consider UTIL thresholds (<88%, <68%, <48%, <28%, & <8%) while you pay down your revolving credit lines.
I am using a snowball method to pay mine down and I got 2-10 points on each card when I moved to next lower threshold.
Best wishes rebuilding!! Know that we are right here with you.