Hi Everyone! I have been going through the archives of this board trying to absorb as much information as possible. What I learned the first day I came here probably would have saved me years of headache when I first started trying to clean up my report! History: DH and I each had several credit cards in college. Normal idiot stuff--charged too many drinks at the bar, meant to pay it off, electric bill is higher than expected so you get behind stuff (what idiot just mails college kids cards in the mail with no application or other information?!) DH started using CCCS who did nothing but screw things up worse, so we reclaimed the accounts. We paid off just about everything before our wedding ('97), then DH got laid off and I was still a student. We were lucky to put food on the table and paying the bills became a juggling game. We fell incredibly far behind. I had one card offer me a charge-off deal and I had no idea what I was agreeing to. I got an inheritance in '98 that covered all of DH's debt so we paid off all of his accounts. In '99 I sold my car (owned out right) and paid off all of our other debt and we have been debt free since then. I had one card that we lowered the balance on and paid a minimal amount each month just to have something with a consistant payment history, but we have paid the balance off as of last month, so nothing being added there. In Sept of '01 we managed to get an auto loan on a car, but it's in DH's name only as my credit (then in the 550 range) was pulling us down. So basically, I have no current credit being established and all DH has is the auto loan. We operate on a cash only basis. Currently our scores stand at 654 (DH) and 661 (me) up considerably from previous scores. We are trying to get in a position to buy a house this summer. Here are the scenarios--I have a credit card (First National Bank of Omaho, prev. First Bankcard) that we just finished paying off. I have a long history of 30 day lates, a 60 day late, and 1 90+ day late (consecutive 12/00-30, 1/01-60, 2/01-90). I have made perfect payments over the last 2 years. Does this sound like a scenario where I could use a Goodwill type letter and implore them to make my account in good standing since I've since turned things around? I have a Target Guest Card (RNB) that I thought had been paid off long ago. I have my own notes on the conversations with them. At one point I pulled my CR to see where we were at and discovered a collection from them I knew nothing about. When I contacted them, they did not have my current address and said that they would remove the collection because I had not been notified. Then they said I needed to pay the debt before it could be done and that I should go to the store and pay cash because that would clear faster. I have documented when I paid, what was said, and follow up phone calls that were returned originally and as the problem failed to resolve, not returned. I was very frustrated and unaware of my rights and never followed up on it. Would the best step be to dispute with the CRAs or go back to RNB first? If RNB, do I write a goodwill letter or submit all the notes I have and make demands? On DH's report: He has several paid charge-offs that we know were paid before they were "charged off". We have battled them for a few years now and everyone but ATTWireless has relented. I'm assuming we are stuck with that one. The other negatives are late pays on a paid auto loan with GMAC--also, he had a "smart buy" loan and they are only reporting the loan amount for after the first 3 years was up. First, has anyone had any luck getting GMAC to remove stuff once the loan was satisfied? Second, anyway to determine if getting the amount corrected (would be higher, but perhaps would add late-pays that don't currently show?) would make things better or worse? And lastly, with our current scores and desire to by a home in the next 6 months, would we be better off trying to obtain a card or two in each of our names or just sitting tight and seeing if we can raise our score enough via the above to qualify? We are authorized users on my parents cards, but they don't seem to be reporting (Amex and AAA Visa)--should we try to remedy that or could that possibly hurt us? (My parents have perfect payment history) Sorry if this is too much for an initial post. Even reading through all of it, it's hard to know what the first line of attack should be. Thanks in advance for any thoughts!
First off do your parents a favor and have your names removed from their cards. Secondly I know you can get a home loan (geez there are so many loan programs out there) as long as both of your scores are over 600. You may not get prime rates but you can get a house. As far as getting new credit I would tell you NOT to get any new credit. Pay off any and all credit cards you have now and cut them up. You don't need to close the account but it resists the urge to use them. Pay off any loans. Or at least get them down. Get your debt to income ratio as low as possible. Save. Save. Save. Try and save up around $5000 in cash for the house. You may be able to qualify for $0 down and even $0 closing but you will, more than likely, have to put down some earnest money so the seller knows you're serious about buying the house. In our case, if our house appraises at a certain dollar amount, we will get our earnest money back at closing and they will put the closing costs into the mortgage. Avoid new credit. Pay off cards. Lower debt to income ratio. Save money for down/closing. Typically I'd say save at least 3% of the price of the home before applying for a mortgage. Lastly, don't think you can't do it. I never thought we'd be able to get a house. We were one year post Bankruptcy and still got a brand new house. But we had no credit cards (not even in the sock drawer), low debt to income ratio (I think if your household is at least $50,000 you should qualify for something) and we had about $4000 saved. We close in two weeks. You? You should close soon too. Good luck. NOTE: I'm no expert by any means. Just giving one scenario lived first hand. If "I" can do it, you can do it.
Thank you for taking the time to respond, but I think you have misread my questions. I'm sorry, perhaps I didn't make myself clear. We have NO CC DEBT. We have been out of debt for almost 4 years now. We have a single car loan of which we owe less than 10K. We have over 11K saved for a home. As to our names on my parents cards--I have had my name on my parents cards since I was 12 years old...We don't use their cards. We don't use credit cards period. This is not the question, really. We are just trying to achieve the best score we can before we shop for a mortgage (we are in an expensive area and the better the score, the better off we'll be) and am wondering if the problems I have noted would be best addressed with the tactics I listed or if I'm on the wrong track. (reference original post regarding FNB, Target, GMAC, etc.) Thank you for the encouragement re: home ownership. It's a wonderful feeling to have tackled your debt situation and feel like you are making progress in the financial world! I recommend it to everyone
