I have been preapproved for an FHA loan by two direct lenders but I've been scared to lock in a rate - one said definitely less than 5% probably 4.2% I want to go to some big lenders - one large bank is actually my employer and I can get fees waived on FHA applications which is supposedly significant. I find myself dreading to ask the bigger banks to pull my credit and move forward to a good faith estimate. My score per myfico.com is 651. I have three goodwill letters out to creditors for past late payments and my current card utilization is less than 10% overall with just 15% usage on my Discover Card. Should I be this embarrassed or am I being silly? I had some late payments due to carelessness in the past but I've been good lately, have almost no debt, and a good income. Should I apply now for a mortgage or try to get my score up to 675? Not sure when that would happen as I do not have anything left that I can do except the goodwill letters ( seems that late payment history is the one thing still hurting my score severely). Or/and I can pay two small collection items that total $250 bucks that I am having a hard time getting pay and deletes responses on....I want to pay the $250 but heard that paying a collection can hurt your score???
There's really no reason to be embarrassed...trust me, there are plenty of people with credit scores that are in much worse shape. Before you have any lender pull your credit scores though, it's always a good idea to have a conversation about what type of scores you'll need to get approved for a mortgage with them. If you're working with a knowledgeable loan officer, they should be able to give you a pretty good feel for what to expect.
You should not be embarrassed of your credit score. You could the ask your bank or mortgage broker what your credit score needs to be to put you a better interest rate. Just tell them what you think your score is currently. You can also give yourself a quick boost in your credit score by adding yourself as an authorized user to one of your family or friends existing credit card accounts. The card must have perfect payment history and they have to be able to maintain a low balance (10% or less of the credit limit). The higher the credit limit and the longer the payment history that has been established the bigger the boost in your score. Thanks! Heather with BoostMyScore.NET
