Help w/ Scores - First Time Home Buyer

[Anonymous]

I'll try to give as much to this story as I can. So, I apologize at how long this all is. I promise it has been much much longer for me....HAHAHA.

About 2 years ago, my wife and I decided that we wanted to buy our first home. At that time our credit was not really in the best of shape. My scores were in the upper 500's. So instead of being sucked into the Sub-Prime Mortgage, we decided we would clean our credit first.
Oct 2005 Scores - TU=560, EQ=585, EX=607

So, I go through and dispute certain things, make payments to some others etc etc...and my scores go up over the course of one year.
Oct 2006 Scores - TU=670, EQ=684, EX=689

At this point on my CR I still had a judgment ($10500) on my record as well as a collection account ($6900 balance) that was affiliated with that same judgment, but have setup a payment plan.
I still had 2 outstanding collections.
Collection #1 = 138
Collection #2 = 113
And I had 2 collection accounts that were paid and closed.
I also have a student loan in the amount of $3300.
I had 2 student loans that were defaulted and turned over to the student loan I currently have and am making payments on.

OK so forward to when we first apply for the mortgage and all pretty much remained the same, with the exception of making standard payments on all current accounts and student loan. My goal at this time was to have at least 2 of my credit scores at or higher than 700.
April 2007 Scores - TU=580, EQ=684, and EX=668

Being that they were not there and actually dropped, I decided to pay off the 2 outstanding collections. This obviously have hurt my scores a bit, but I HAD no outstanding collections left. I Satisfied a new collection that popped up in the amount of $450. The problem is, my scores did not take a little hit for paying all of this off, but took a nose dive.
June 6th 2007 Scores (these here are FAKO scores) - TU=612 , EQ=538 , EX=540

Here is my what my CR has in TOTAL right now.
3 open and current credit cards.
Balance is $220 with limits totaling about $15k. On-time payments last 24 months with no lates ever.
1 closed credit card, ended in good standing.
2 paid in good standing, but closed personal loans in the amount of $10k.
1 Charge off that is paid in full w/ zero balance.
1 Student Loan Current, good standing w/ balance of $3100 (14 months of on-time payments)
2 closed charge off student loans, that are now the above good student loan.
3 closed, paid in full "past due" collections
1 collection that shows balance of $150 (original was $450), but I satisfied in full, the CR just is not updated yet, it will take about 30 days.
1 judgment that was $10500
1 Collection, that is for the above judgment, with balance of $5800.

In the past 2 weeks I Satisfied the judgment in full, so that will update real soon. This then takes care of the $5800 balance on the collection, and that should update in 30 days.

Basically, the reason I am writing all of this is because I am doing everything I can to get my credit fixed and my scores up. I have paid EVERYTHING off, and in doing so, "killed" my credit scores. What can I do at this point to help my credit scores?

Please any help would be so much appreciated.

THANK YOU,
HomeBuyer44

Message Edited by HomeBuyer44: to format properly, so it reads better

Message Edited by HomeBuyer44 on 06-06-2007 11:03 AM

[Boswd]

Yes it does stink in the short run to have this happen but it's best to do it now and on your own because your mortgage lender would have required you to do so anyway.    so now you have time to rebuild your score.    Use your credit cards wisely each month and them pay them down to very low balance to keep your Utiliztions % below 30% better for even lower.   don't close out any more credit cards but get their balances low.   You score will rebound.  and look on the bright side, you are becoming debt free.

Also mortgages lenders look at you debt to income ratio almost as much as your credit score.   So you are and just wiped away alot of your debt.   Just keep it up and you will bounce back.   

[Anonymous]

Thanks for the message.

Yes, you are correct. Right now I am pretty much debt free, with no collections out there any longer that can creep up on me. All past due and collection accounts have been satisfied and have zero balances.

The only debt I have left is the $3100 student loan, that I make monthly payments on.
I do not want to pay this off right now, as the consistent payments are good for my credit score and reports. I also have $200 on one credit card, but I really don't consider that anything, cause that just fluctuates between $50-$300 balances, depending on spending each month and when they report. I basically pay it WAY down every month. My limit on that is $12,000.

I am looking for ways right now to clean up the report, now that I have paid everything off.

1. Would it be good to dispute all of these now as "Not Mine" or something else to try and get them deleted? (wait 3 or 6 months and then dispute)

2. Would it be possible to call the creditor and ask that they remove things, as a good will gesture?

3. Once the judgment shows up as Paid and Closed/Cleared, is there a way to get that deleted from my report?

4. Anything else I can do to clean up the report?

5. Would it be a good idea to apply for another credit card right now? (I only have one in my name and 2 that I am AU on - which will go away according to the new "rules")

6. Anything else I can do, financially, that would help raise my scores?

Thank you in advance.......
HomeBuyer44

[Anonymous]

1. Would it be good to dispute all of these now as "Not Mine" or something else to try and get them deleted? (wait 3 or 6 months and then dispute)

Would have been better if you negotiated BEFORE you paid these. You can try to goodwill them but I find after they get paid CA's have little interest in you. The upside of that is that (from my experience) if you do dispute, they may not care to validate and it gets deleted. Look for the smallest discrepancy (dates, etc), and if found dispute as inaccurate.

2. Would it be possible to call the creditor and ask that they remove things, as a good will gesture?

Well....sort of. Don't call the cube farm. Appeal to someone higher on the food chain. This usually requires a little research. I've used email, fax and letters with success. Calling is almost 100% a waste of time.

3. Once the judgment shows up as Paid and Closed/Cleared, is there a way to get that deleted from my report?

As with TL's dispute as inaccurate if any dates, balances are incorrect, etc. You don't need to be specific.

4. Anything else I can do to clean up the report?

Dispute all inaccuracies and historically you will get favorable results. Goodwill where you can, sometimes good for getting lates removed, etc.

5. Would it be a good idea to apply for another credit card right now? (I only have one in my name and 2 that I am AU on - which will go away according to the new "rules"

I hate to recommend getting credit cards, but it's almost a necessary evil. A few revolving accounts would do you good. Keep low balances and pay on time and watch your score creep up. You may have to wait 6 months for the payoff, but it will come.

6. Anything else I can do, financially, that would help raise my scores?

All of the aforementioned. Is your AU account under 15% util? Hopefully so. When your mid score hits about 630, check out FHA, Fannie Mae programs, and start grooming your DTI to be under 38% when you apply. They care about that more than your FICO. Good luck!

Message Edited by devhip on 06-07-2007 10:36 AM

[Anonymous]

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@Anonymous wrote:
Is your AU account under 15% util? Hopefully so. When your mid score hits about 630, check out FHA, Fannie Mae programs, and start grooming your DTI to be under 38% when you apply. They care about that more than your FICO. Good luck!

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Yes, the AU account is currently a Zero Balance, on a card that has no lates etc and is 9 years old.

I was approved on FHA, based on my "older scores" that were in around 690, prior to paying all this off. But that is passed now, cause of the amount of time is greater than 90 days since the credit was pulled.

My DTI is already at 2%.
Monthly income = about $3800
Monthly payments = $75
(I don't really have debt any longer - just the one student loan that is $3100)

THANK YOU FOR YOUR OPINIONS ON GETTING THINGS OFF THE REPORT.
I WILL DISPUTE AS INACCURATE ON ALL PAST PAID AND IF THAT DOESN'T WORK, THEN WILL WRITE GW LETTERS TO ASK THEM TO DELETE. IS THAT THE BEST ORDER OR SHOULD I SWITCH THAT AROUND?

Thanks,
HomeBuyer44

[Anonymous]

I've done it both ways. Generally I'll dispute first because it drops if not verified. If it keeps verifying I've had success with GW. Wish I had your DTI! Even with a higher income I barely nudged in on a Fannie Mae, but it's because of child support, car payment, etc.

[Anonymous]

I am closing on a refi this month and my scores are similar: TU 553, EQ 649 and EX 682.  I have a collection that appears only on TU that is killing me.  But since my midFICO is 649 I am qualifying just fine for a prime loan.  As far as score goes, the midFICO is the only thing the lender cares about. Of course, there are other factors.  But having just one trashed score shouldn't keep you from getting into a house.