Trying to move in the right direction for home ownership

[Anonymous]

I really would like to purchase a home in 3 years around my 29th birthday . I graduated and I am working on improving the credit. I have about Ask in student debt. I think I am going to stop aping for anything. This past year my car died so I had to get one and I got a few new accounts. While aping I got a score from cit of 683 from exp. and a 718 from chase with equ. I am not sure what would be a good score to use for getting a mortgage but I do know that when I was 18/19 I got credit cards that dropped my scores near 550 so I think these scores are great compared to that. I really want the chase Disney visa but I had chase in college and it did not end well and they deny me for everything. The problem was I went on bedrest for 5 months when I was pregnant with my son and I missed a few payments while I was out of work and they closed my accounts. So I figured I would leave chase alone until I one day purchase a home. What should I do next besides save and pay off debt to improve my score. I read on my report that I do not have enough prime bank card accounts and lots of inquiries, and a charge off where negatively affecting my score. I have no idea what any of that means. I know I have to wait for the inq. to fall off 2 years. Im pretty sure I cannot do anything about a charge off. I put my family phone bill in my name and we switched to another company, I did not realize I had a balance but the company called and said if I paid so much I would not have to pay the full amount and it would not affect my credit. I am assuming that was the charge off and it did in fact affect my credit? Can someone explain a charge off and what is a prime card. I currently have the following cards. Do they mean non store cards by prime bank cards?

Jcpenny store

lowes store

children's place store

Amex SPG

Capitol one cash rewards

old navy store

new York and company store

toys r us mastercard

carecredit

citi thank you visa

[chasmith]

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@Anonymous wrote:

I really would like to purchase a home in 3 years around my 29th birthday . I graduated and I am working on improving the credit. I have about Ask in student debt. I think I am going to stop aping for anything. This past year my car died so I had to get one and I got a few new accounts. While aping I got a score from cit of 683 from exp. and a 718 from chase with equ. I am not sure what would be a good score to use for getting a mortgage but I do know that when I was 18/19 I got credit cards that dropped my scores near 550 so I think these scores are great compared to that. I really want the chase Disney visa but I had chase in college and it did not end well and they deny me for everything. The problem was I went on bedrest for 5 months when I was pregnant with my son and I missed a few payments while I was out of work and they closed my accounts. So I figured I would leave chase alone until I one day purchase a home. What should I do next besides save and pay off debt to improve my score. I read on my report that I do not have enough prime bank card accounts and lots of inquiries, and a charge off where negatively affecting my score. I have no idea what any of that means. I know I have to wait for the inq. to fall off 2 years. Im pretty sure I cannot do anything about a charge off. I put my family phone bill in my name and we switched to another company, I did not realize I had a balance but the company called and said if I paid so much I would not have to pay the full amount and it would not affect my credit. I am assuming that was the charge off and it did in fact affect my credit? Can someone explain a charge off and what is a prime card. I currently have the following cards. Do they mean non store cards by prime bank cards?

Jcpenny store

lowes store

children's place store

Amex SPG

Capitol one cash rewards

old navy store

new York and company store

toys r us mastercard

carecredit

citi thank you visa

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The minimum score for an FHA loan is going to be 620 to 640.  A 740 gets you the best rates on conventional financing.  Remember these are "mid-scores", the middle score of the three real FICO scores, don't get confused by FAKO scores (the scores from apping for a car loan could be "auto-enhanced" so might not reflect what a mortgage lender would see).  You might also look at the NACA program which isn't score driven, requires no downpayment and has no closing costs.

A chargeoff is an accounting term, where the lender classifies the loan as a bad debt.  That doesn't affect the fact you owe the debt and is a major derogatory.  Derogatory items age off 7 years plus 180 days from the Date of First Delinquency.  If the CO hasn't aged off a mortgage lender will almost certainly require you to pay it.  So if you still owe it and it's not going to age off soon you might try for a PFD.

Prime cards would be cards given to prime borrowers.  I believe your Amex and Citi Thankyou are considered Prime, your CapOne Cash Rewards may be, CapOne offers both prime and subprime cards, Don't confuse that with store card vs. bank card.  A bank card is a card with a national logo (MC, VISA, Amex, Discover).  It's bank cards, not prime cards, that help your score more than store cards.  I think you have four bank cards - Amex SPG, Capitol one cash rewards (probably a VISA), 

toys r us mastercard, and citi thank you visa. The general recommendation is two or three bank cards.  Your credit card mixseems good, I wouldn't close any but there's really no reason to apply for more.

You aren't clear about how your cards are showing on your reports.  While you want to use each card and let it report a balance occasionally, to maximize your score you want to be sure your utilization is less than 10% total, no card has util much over 10%, and "more than half" of your cards report a zero balance.  So of your 10 cards, be sure 6 report zero each month.

Inquiries stop affecting score after one year although they stay on your report for two. 

Seriously, if I were you I would go to a NACA workshop now, and you could probably be qualified within six months to a year.  Rates are a little lower right now, my NACA loan closed last April, 30 year fixed, no closing costs, no downpayment, 2.92%.  My principal, interest, taxes and insurance are less than I was paying for rent.

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[algorithmslave]

I am kind of in the same boat. recently I paid a Charge Off account and surprisingly got a massive boost in my score. What I have now is five installment loans and two credit cards. I am on the cusp of a middle score of 700! My biggest hurdle has arrived! That is, playing the game....as I PIF my credit cards each month I recieve no benefit from the score. As I charge, pay some, leave a small balance...I may see a small increase over time or a small decrease for a later larger increase....time to make an attempt at figuring out what 'Ma'dam Zelda The Psychic' wants from us....