As I am starting to "get ready" to apply for a mortgage and learning how/what lenders are interested in, I'm realizing that getting your CR ready for a mortgage app has different goals than getting ready for a credit card and getting a higher FICO score. Turns out that the automated process that credit cards use, with a quick manual scan, has different criteria than mortgages. I have a Ch7 BK filed 8/01, discharged 2/02. I have no lates or collection accounts, simply a crapload of tax liens. The Ch7 took care of the taxes owed. My remaining negative TLS - two of them - now correctly state included in bankruptcy and no longer say late or charged off. Credit card companies really don't like this. Although over two years old, they still seriously hurt my score. Here's the punchline - mortgage vendors love 'em. Why? Assuming they're alright with my BK (two years from discharge seems to be the magic date), every negative TL fits into that bin - they're covered, explained and not a problem. I have worked my ass off to get 15 out of 30 tax liens dropped from my public records. The remaining ones I have gotten marked as released. Many believe this is not a good thing, and for FICO/CC apps, probably not - it's a flag, regardless of being marked released. Once again, for my mortgage app, this is a good thing - they're released in the CR. No extra paperwork needed. My scarlet letters for Amex, BofA and Chase (in their recent rejection letters), the BK in public records, as explained above, is just fine for a mortgage. I went out of my way to establish one new credit card - cap1 - and purchase a car w/a loan in the last year. I'm sure these have had no effect on my credit card approvals (all rejected), marginally helped my scores but again, have made a huge difference for a mortgage. They love the fact that I've established new credit lines, secured and unsecured, and have a 15k CL w/10% utilization. So I wanted to post this thread to discuss strategies that are not always best for FICO or CC approvals, but are important for mortgage apps. It has just dawned on me that FICO and CC improvements are most of what is discussed here and although important, only part of a bigger picture if you're going for a mortgage. I realized that once your FICO scores are above a certain point (mid 600s I think), your FICO itself is not that important. When someone is evaluating your history, the reasons for choices you made (in my case, why did I do a BK), the way you've rebuilt credit, the value of those particular choices is more evident. I hope this becomes a productive thread.
Just to lift your spirits about getting a mortgage... I got a 5.5% FHA for 123,800 with a 604 midscore, 24 paid medicals (most pretty old), 2 unpaid medicals, 2 collection accounts, and a judgment form North Carolina from when I punched a guy in the face in a bar and broke his eye socket (cost me $650, but it was worth it) I thought my rate was going to be closer to 7.5, so I was pleased when I sat down at closing and saw the 5.5 rate. Good Luck, there is nothing like being a homeowner. And if you happen to live in Florida, I got a guy....
Wow, 420greg, I'll remember not to get on the wrong side of your posts. Also seems out of character with the numeric portion of your handle. <grin> I should have mentioned my constraint here is a zero down loan, makes it a bit tougher. But I still think it's important for folks here to realize that CC/FICO "upgrades" may be moot or even harmful for mortgage qualification.
