Posted on: 07th Feb, 2011 09:55 pm
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Hello.... I have a question ! We have just got pre-approved for a mortgage and it's so exciting for us after being tied down from our credit problems for years. Here's my question ! We agreed to pay off our judgement of 2500 and little collections of $250 and $100 dollars before closing. Now if we pay these willl our score go up ? its a 582 now and the mortgage broker said that we need a 620 and once we get everything paid and done is there any way that this can still deny us? we also have a car repo that was 4 yrs ago but the mortgage broker told us to not worry about that. He had us pick out our house over the weekend and i'm getting excited but i am still feeling doubt. Is there anybody out there who has come out of something like this? thanks in advance =)
Hello.... I have a question ! We have just got pre-approved for a mortgage and it's so exciting for us after being tied down from our credit problems for years. Here's my question ! We agreed to pay off our judgement of 2500 and little collections of $250 and $100 dollars before closing. Now if we pay these willl our score go up ? its a 582 now and the mortgage broker said that we need a 620 and once we get everything paid and done is there any way that this can still deny us? we also have a car repo that was 4 yrs ago but the mortgage broker told us to not worry about that. He had us pick out our house over the weekend and i'm getting excited but i am still feeling doubt. Is there anybody out there who has come out of something like this? thanks in advance =)
Hi Guest,
If you pay off the collections, it will have a positive affect on your credit score. However, paying off the collections will take some time to reflect on your credit scores. You may get a FHA loan once you pay off the collections.
Take care.
If you pay off the collections, it will have a positive affect on your credit score. However, paying off the collections will take some time to reflect on your credit scores. You may get a FHA loan once you pay off the collections.
Take care.
Thank you ! It makes me feel better that we will prob get approved at the end of this...
A Rapid Rescore might work better for you. It'll cost a fee, but you'll get your new FICO scores much faster. Have your Loan Officer work directly with the Credit Bureau's using their Rapid Rescore functionality, and get your new FICO scores before looking for a new home. I disagree with your Loan Officer about telling you to look for a home now - she doesn't know what your new FICO scores are going to be when you resolve the problems. And FICO scores can drop after a Judgement is paid off - I strongly recommend waiting until you know your new FICO scores before shopping for a new home.
And I'm wondering why the Loan Officer is saying 620. Most Lenders have overlays, requiring a minimum of 640.
And I'm wondering why the Loan Officer is saying 620. Most Lenders have overlays, requiring a minimum of 640.
hmmm.....Yes i feel like we are doing things backwards. We are actually putting in an offer on a home which shocks me cause we still have to pay the judgement next week. The mortgage broker has told us that once things are paid off that he would do the rapid rescore for us. I am hoping that once that happens and with time that our score will increase. The home we are wanting to get is a short sale so they are saying that it can take up to 4-6 months to close and the mortgage broker tells us that it gives us time time to get everything straightened out before closing. Im just nervous cause i dont want to be disappointed in the end. Thanks for your time .
I'm glad Raymond popped in with his commentary on the loan officer suggesting you go shopping already. I was set to pounce on that myself. You may well be dealing with someone who's inexperienced, so you need to be cautious throughout this process.
Putting in an offer at this juncture is not a particularly good thing to do. Your credit scores are not going to be sufficiently better overnight, and it takes a while for the judgment to appear as paid...you're doing an injustice to the seller of the home if you move that way.
"Once things are paid off" is completely different than "once a creditor updates its records and reports to the credit agencies."
You are right to be nervous - unless this loan officer has an awful lot of experience in this sort of thing, it sounds to me like you need to be more wary than ever of dealing with that person. Maybe there's a magic to the LO's method, to twist a bromide.
Putting in an offer at this juncture is not a particularly good thing to do. Your credit scores are not going to be sufficiently better overnight, and it takes a while for the judgment to appear as paid...you're doing an injustice to the seller of the home if you move that way.
"Once things are paid off" is completely different than "once a creditor updates its records and reports to the credit agencies."
You are right to be nervous - unless this loan officer has an awful lot of experience in this sort of thing, it sounds to me like you need to be more wary than ever of dealing with that person. Maybe there's a magic to the LO's method, to twist a bromide.
Here are the basics when it comes to "rapid rescoring".
The most popular way to rapid rescore is through updating credit card balances.
255 points in a credit score are based upon your credit to limit ratios on your revolving credit cards (not installment or mortgage accounts).
Credit card balances only report to the bureaus every 30-90 days depending on the credit card company. So if you pay your card down today, it's going to take time for the balance to show up and help your scores.
Rapid rescoring updates the balance in 3-7 days, which typically increases the credit scores.
I had a client back in March that we rapid rescored 5 of his credit cards that he paid down to 30% of their limits.
We witnessed a 151 point INCREASE to his scores.
This pushed his scores well into the 700's, and his pricing on his mortgage loan with his bank GREATLY improved. I believe he saved in the neighborhood of .75% in interest rate on his initial quote from the bank.
You can also rapid rescore collection accounts off of your credit report with a "deletion letter" from the collection company, this also enhances your scores.
Rapid rescoring is all about documentation. With proper documentation the bureaus will make adjustments to your accounts.
The most popular way to rapid rescore is through updating credit card balances.
255 points in a credit score are based upon your credit to limit ratios on your revolving credit cards (not installment or mortgage accounts).
Credit card balances only report to the bureaus every 30-90 days depending on the credit card company. So if you pay your card down today, it's going to take time for the balance to show up and help your scores.
Rapid rescoring updates the balance in 3-7 days, which typically increases the credit scores.
I had a client back in March that we rapid rescored 5 of his credit cards that he paid down to 30% of their limits.
We witnessed a 151 point INCREASE to his scores.
This pushed his scores well into the 700's, and his pricing on his mortgage loan with his bank GREATLY improved. I believe he saved in the neighborhood of .75% in interest rate on his initial quote from the bank.
You can also rapid rescore collection accounts off of your credit report with a "deletion letter" from the collection company, this also enhances your scores.
Rapid rescoring is all about documentation. With proper documentation the bureaus will make adjustments to your accounts.
I have looked into your case and I am happy for you that you have been re-assigned with mortgage. As far as your question is concerned you should look for an expert to consult him and get the proper feed back.
BMW....HUH????? What's that post about? Who are you talking to?