Bad Credit Mortgage (home loan, credit card, financing, loan)

[seamusyams]

Hi All,
Am I dreaming?

I want to buy a $170,000 house and have 10% down.

My business failed 4 years ago and my credit is littered with charge-offs and collections from that period. I currently have only 2 open lines of credit: a dept store card with 0 balance current for over 5 years, and a credit card with a $250 balance current since opening 20 months ago. I have one unpaid judgement that can be paid off if necessary.

My credit scores are 524, 544, and 557

I have been employed for 3 1/2 years- however I got a new job only 5 months ago that doubled my income.

I have no late payments for over 2 years on anything. I had a car loan that reposessed in 2004, but my credit report does not show it as repossessed- and the company keeps reporting "collection" every month- would FHA consider this as a current "late"?

Do I have a chance at all?

Thanks.

[renriq02]

1. repossesion balances will normally be required to be paid off.
2. collections may have to be paid
3. medical collections don't have to be paid
4. all judgements have to be paid.
5. recent lates in the last 12months will hurt you

your scores are low for other reasons.
I would look into credit repair or a loan officer who knows how to do it.

Although, FHA has no credit score requirement, most FHA lenders are requiring a 580 minimum credit score.

Originally Posted by seamusyams

Hi All,
Am I dreaming?

I want to buy a $170,000 house and have 10% down.

My business failed 4 years ago and my credit is littered with charge-offs and collections from that period. I currently have only 2 open lines of credit: a dept store card with 0 balance current for over 5 years, and a credit card with a $250 balance current since opening 20 months ago. I have one unpaid judgement that can be paid off if necessary.

My credit scores are 524, 544, and 557

I have been employed for 3 1/2 years- however I got a new job only 5 months ago that doubled my income.

I have no late payments for over 2 years on anything. I had a car loan that reposessed in 2004, but my credit report does not show it as repossessed- and the company keeps reporting "collection" every month- would FHA consider this as a current "late"?

Do I have a chance at all?

Thanks.

[seamusyams]

Thanks for the reply reriq.
What do you mean "for other reasons". Is that car repo reporting every month as a collection considered a current "late"?

[renriq02]

it is not, but more than likely the balance would need to be repaid.

you may have multiple collections rereporting every month.
i would check all 3 credit reports

Originally Posted by seamusyams

Thanks for the reply reriq.
What do you mean "for other reasons". Is that car repo reporting every month as a collection considered a current "late"?

[Modification Specialist]

Maybe your dream can come true....

But first lets work on getting your credit score up. There are many things you can do to raise your score.

First get a copy of your own trimerge credit report, I want you to examine it for any mistakes. 65% of credit reports across the country his mistakes on them that can disqualify for for financing. You're going to dispute any mistakes to the credit bureaus.

Next you need to work on a plan to raise your score. Your two CC acounts you have open - I want you to use them and pay it when the bill goes due. On the card let you owe $250, what is the credit limit? Anytime you are over 50%, your credit report will take a hit.

As for the $17k you have in the bank - leave it. When you are appling for a home loan. You need to prove the money in the bank is seasoned. Talk to you bank, put a portion of in a six, year month CD. Then work on a budget where you are putting a portion of your income in savings each month.

There many more things you can do to raise your credit score, this is just a start.

Think about this - before you get into a long term situation, work on getting your self ship shape over the next year. So you can get into a good 30 year loan.

PM me if you want me to answer anymore questions.....

[tony23]

a couple of warnings:

First, be sure to use annualcreditreport.com if you want to get your reports online. That's the only one that is actually free - it's run by the credit bureaus. Don't use that other one that hires the singing guy to hawk them.

And as for credit repair services? It's REALLY hard to find ones that are legitimate. And anything that a legitimate one can do, you can do yourself.