Hello all, Need some advice. Thanks to this great board, I have raised my credit score 140 points in 1 year. My husband and I want to buy a new house in a new development near our home. Last year, we inherited the house his Mom owned after she passed away (the house is paid in full--we're very fortunate). We are considering renting out the home in the next few months once all the clearing out and some maintenance is complete (we may even live in it for some time to save up some more money for a down payment - we hate the thought of moving twice). My question is: My husband's score is 725 and mine is 637 (I checked both Jan 2005). Both scores come from Equifax. 1. Will these scores keep us from getting a mortgage? 2. Any ideas at what interest rate? 3. I have 2 negatives on my report (he has none), $116.00 from CMRE Financial dated 10/1/1999 (old medical bill) and Charge-off from Cross Country Bank dated 11/1/97 indicates " Transferred to another lender or claim purchased" (shouldn't this be off by now -- 7 yr SOL in CA?). Should I pay these by negotiating removal? Any advice would be so appreciated!!!! Thanks, CR
Hi CR! 1. The scores will not stop you from getting a mortgage, they will only influence your interest rate. There are lenders out there who will risk loaning peope in the 500's! 2. I think LendingTree.com has a little score guide to interest rate, as I recall. I do not personally know. 3. This is what will hang up getting a mortgage. Lenders want to see that you do not owe anyone. They don't like to see charge-offs within the last three years, and if you have an older one, they want to see it paid off. So, if you have a charge-off, make sure it's reporting a zero balance as once the company has written it off (gotten a tax write off) as a charge-off they can not legally report a balance due. Your second one from 1997 is an easy deletion, I would just call and ask for what they are showing as the date of last activity... if it is '97 they will delete it. If not (say they show 1999) and you are positive DOLA is '97, the dispute it. This board is all about paper trails (as it should be! ;-) ), so you may want to do it in writing... I just think that's an easy one. If your medical is with a collection agency, I would try to offer payment in full for deletion. If they refuse to accept, pay it anyway and make sure it reports a zero balance, and you can get your mortgage!
Hi CR. These scores won't hurt you in the least. One thing that will help you is to get yours to 640. quickest way is to pay down any credit cards you might have a little. You only need a few points. With scores in the mid 600s, earlier this year we got a $375k mortgage on a $600k+ house at 5.15% on a 30 fixed (we switched from an ARM for comfort reasons). We also got a HELOC for $70,000 for home improvements. The HELOC is at prime for life. So you should be fine with your scores! aiki
Thanks so much for the great advice. I really appreciate it and I am finally realizing that we may be able to get the new home we want! As far as the negatives go, I will do what I can to get those removed. I just realized the date on the credit report is the date opened. I will have to fish around to find the date of last activity. I will try and negotiate removal of the small medical bill (one negative is better than 2). My plan is to have all my credit cards paid off by June (I only have about $4500 left on 3). I paid $1100.00 this month which leaves only about $3400.00 left. One more question though. If I pay off the two negs and they show up as paid; charge-offs, will this lower my score any? Thanks again, CR
Score-wise, a paid charge off is about the same as an unpaid one, so paying them does little to your score. However, if an underwriter reviews your loan (as they often do for mortgages) he may want to see all charge offs paid.
