In short, I have a home, have had a mortgage for 19 years on 3 different homes. My job has been relocated and I need to move. So I go to apply for a mortgage. On my report...i missed 4 payments on my car in the past 2 years, all 30 day reports. The most recent was last month. In dec 06 I had a 30 day late on my mortgage, due to weather issues. I have one credit card, limit is 5k, it has 4k on it. It was maxed out 2 years ago. On EQ it shows my credit score at 545. Which means I can't get a mortgage. On trans, it goes into some credit issues I had 7 years ago, one particular card went 90 days late and then I paid it off. I had the death fairy at my house and just didn't get things done. So what do I do? How do I get my score high enough to get a mortgage? How long will it take to recover to 600? Is there someone that I can consult with that can fix this for me? I have a time line to move (before school starts, AUG 2). How can I in good conscience sell a home without the ability to buy another one? Thanks!
I hate to be the bearer of bad news, but it sounds to me like you'll be renting in August. Not that renting is all the bad...in fact, it's a great time to rent right now in many places. It's going to take a lot longer than a month to work on your reports and improve your credit score. But first, you should start working on paying down your credit card debt right away. Credit utilization accounts for about 30% of your credit score, and you're currently using way too much of your available credit. Pay that debt down to 10% or less of your credit limit and you should see a nice boost in your credit scores. The old 90-day lates should be falling off your reports soon, so I wouldn't worry too much about them at this point. However, the recent 30-day lates are going to keep hurting you for some time. The best thing you can do is not be late or miss any more payments on your car from this point forward. As you make on-time payments, pay down your debt, and maybe even add another credit card to the mix, you should see you scores improve over time. It's hard to say exactly how long, but be patient - credit scores don't improve overnight.
I agree with Joshua. You need to rent for a while. If you're having trouble paying things like a car loan, you're in no position to buy a house. Renting isn't the end of the world. Take some time to get your credit in order (and save a little money) before taking on another home.
Thanks for the advice. I paid down my credit card. So I will sit and wait. Sadly my issues are not money related, but paperwork related. I need a personal secretary to keep up with my stuff. I am starting to set everything up on auto payment and life will be better. This is such a huge eye opener. I really just never thought about my credit score. I have always been able to get the loans I needed when I needed and since I mostly live off cash it wasn't a big deal. We made plans to rent for 3 months. We are waiting to sell this house for a month, and we will rerun our credit and see if we can get a mortgage. Double paying rent and a mortgage and bills is not something we want to do for long.
Yes, autopay is a beautiful thing. Don't forget to check in on it every month though to make sure the auto payment went through on time, posted correctly, etc. Sometimes mistakes happen and you don't want to get surprised with a 30-day late. Good luck selling your house, and please come back to let us know how everything plays out for you. Also, when you pull your credit, make sure you're checking your FICO scores and not some FAKO score that a lender would never actually use to assess your credit risk.
