Posted on: 01st Jun, 2010 05:46 pm
I've had some charge-offs and collections on my credit report. Due to a sizable refund from student loans from going back to school, I was able to wipe out all of my past debts. This brought my credit score to 543 (Experian)
Other than student loans and an auto loan, I have no other expenses. I have zero debt. I'm ready to buy a home because I'm tired of paying rent. But, I've been told I have to wait up to a year for my credit score to raise to at least 620. I don't want to wait that long, especially since homes in the neighborhood I want to buy into are dirt cheap. Do I have to wait for my score to increase? Or are there lenders out there willing to work with someone with zero bad debt, but a spotty history?
Other than student loans and an auto loan, I have no other expenses. I have zero debt. I'm ready to buy a home because I'm tired of paying rent. But, I've been told I have to wait up to a year for my credit score to raise to at least 620. I don't want to wait that long, especially since homes in the neighborhood I want to buy into are dirt cheap. Do I have to wait for my score to increase? Or are there lenders out there willing to work with someone with zero bad debt, but a spotty history?
Hi itsmeorthedog,
Can you tell what are the status of all these charged off and collection accounts? Is the status on these showing "Paid"? Are still the negatives there on your credit report?
This is true that you will have to improve your score first to get a loan. The minimum requirement for a government loan is 620. There are various ways in which you can improve your score. Yo can try to get a new credit card. However, as you have low credit score you may not qualify for an unsecured credit card. Thus, you can try to get a secured credit card. Secured cards are easy to get with low scores too.
After getting the secured card, make small purchases using the card. Then make on-time payments on these purchases. This is definitely going to improve your score.
Other than this for improving your score in a less amount of time, you can get added as an authorized user on somebody else's account who has a good score. An authorized user is not held liable for the dues on the account.
Thanks,
Sandra
Can you tell what are the status of all these charged off and collection accounts? Is the status on these showing "Paid"? Are still the negatives there on your credit report?
This is true that you will have to improve your score first to get a loan. The minimum requirement for a government loan is 620. There are various ways in which you can improve your score. Yo can try to get a new credit card. However, as you have low credit score you may not qualify for an unsecured credit card. Thus, you can try to get a secured credit card. Secured cards are easy to get with low scores too.
After getting the secured card, make small purchases using the card. Then make on-time payments on these purchases. This is definitely going to improve your score.
Other than this for improving your score in a less amount of time, you can get added as an authorized user on somebody else's account who has a good score. An authorized user is not held liable for the dues on the account.
Thanks,
Sandra
FHA doesn't have a minimum credit score but, lenders have their own overlays. Most lenders created a minimum accepted fico score of 620. There are several lenders that will lend on sub 620 scores but, they are far and few. Do your research, you'll find a lender that will entertain your scores. If your mid score is under 580, the lender is going to require 10% as minimum down payment.
