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My husband and I had absolutly perfect credit 3 yrs ago, we could get approved for anything, unfortunatly some circumstances out of our control, Car wreck, layed off, etc., happened all at once and our credit got ruined. However this year my husband recieved a big pay increase and we will be out of debt at the end of Feb. We want to buy our first home at the end of this year, my question is how soon after i pay off the debt will my credit reprot start looking better. How soon can i start inquiring about home loans, to get the best rate possible?

2007-01-22 07:45:01 · 8 answers · asked by Angel 2 in Business & Finance Credit

I will have a $10,000.00 down payment as well. I have to buy at the end of the year cause my husband is on active duty in Arizona right now and me and our kids are out here with him and we have no home to go back to, and renting is such a waste of money we dont even want to attempt it.

2007-01-22 07:56:46 · update #1

8 answers

Bad credit does stay on for 7 years except bankruptcy which is 10 but most lenders look for 2 to 3 years of good credit. So what we did was use our cards for things we always buy like groceries and things but deduct the money from the check book register like we had written a check. Then at the end of the month pay it off. That way your report shows continued use and current payments. Lenders will usually ask for an explanation about what happened at a certain time and will still work with you as long as you have shown yourself to have overcome it. I would write your explanation down and have it with you at the time you apply so they can put it in your file. Good Luck

2007-01-23 10:07:34 · answer #1 · answered by micheletmoore 4 · 0 0

Any bad debts, delinquent payments or defaulted debts you had will stay on your credit report for years. You can get a free copy of your credit report from the URL I've listed below. However, even if you pay off all your debts, your FICO (see definition in URL) score will be lower due to the deliquent payments you had. This will affect the interest rate you pay for your mortgage. You may actually want to wait a year before buying a house to establish the fact that not only have you payed off all your debts, but that you continued to maintain good payment habits thereafter. This will help your FICO score. You will also want to establish a larger down payment for your house. This will also demonstrate to lenders that your income is steady enough to reduce your risk.

2007-01-22 07:52:53 · answer #2 · answered by phantomlimb7 6 · 0 0

If all of your delinquent accounts have been settled and all of your debt will be paid off, your credit will begin to increase. It really depends from situation to situation on how your FICO score will end up. However, if you can stay at $0 debt on cc at least, pay your monthly bills on time for the next year, you should be well on your way to getting a mortgage. I suggest holding off as long as possible before getting pre-approved for a mortgage. You can look online and there are plenty of helpful mortgage calculators you can utilize. I personally think it's best to give yourself a house budget before you get pre-approved for a mortgage. B/c they may approve you for $200k, but you may only be comfortable paying a $150k mortgage. This is why many people get in over their head. Also, I would open up an online savings account at 5.05% (Emigrant or HSBC Direct). This way you can build interest on your down payment and you will be less apt to spend it. Also, if you are a first time homebuyer, there are many good programs that will have lower interest rates and require lower down payments.

2007-01-22 08:42:40 · answer #3 · answered by Anonymous · 1 0

Start talking to a couple loan officers/mortgage brokers soon.

Find someone who is willing to work with you to actually get your credit report cleaned up before you want to buy. This process can take months, as any dispute takes 30-45 days to clear, and you may have to do it more than once. So if you want to buy in 8-10 months, starting now is best.

Often, paid collections can be deleted from your record. It might even make sense to pay a company to do this stuff for you, though it can be done yourself if you research how to do it. Or maybe you find a loan officer who has some experience with it.

Find someone who isn't only trying to push you into a subprime 2/28 ARM. You should look for someone willing to try to get you agency or FHA loans first. If they don't know what an agency loan is (Fannie Mae or Freddie Mac products), find someone else.

2007-01-22 07:50:43 · answer #4 · answered by Anonymous · 0 0

It is standard practice that information, negative or positive, be made available for seven to ten years. However, there is NO law in the United States that says the information HAS to be maintained for that length of time. The Fair Credit Reporting Act makes it clear that the information CAN be listed for that length of time but does not make it a REQUIREMENT. The information does not have to stay on your credit report for seven minutes much less seven years if you don't want it. There are provisions in the FCRA that allow you to have negative information removed from your report. In fact the FCRA consists of 340 different laws. This gives you 340 different tools to use. Congress passed this act into law to PROTECT you from the erroneous and inaccurate record keeping practices of the credit bureaus, so use it. The credit bureaus and lending agencies don't want you to be educated because this hurts their business. So educate yourself; or hire someone who is educated in these matters (a lawyer or credit restoration company) after doing your due dilligence.

I have posted in other threads ten tips on how to tell the legit credit restoration companies from scams. If you cannot locate those threads you can email me and I will be happy to email you the same article I posted to them.

If you have any questions regarding your credit issues, you may email me at nebula7693@yahoo.com

2007-01-22 10:22:30 · answer #5 · answered by nebula7693 4 · 0 0

Seven years is the standard for credit reporting to retain items....

2007-01-22 07:48:11 · answer #6 · answered by Tiger by the Tail 7 · 1 0

you are able to't get it taken off early yet you are able to take steps to strengthen it. I study in a piece of writing on-line about a guy who declared financial ruin and managed to strengthen his credit interior of two.5 years and change into in a position to get a automobile loan. even as the interest fee change into extreme, he made each attempt to pay it off right away. interior of three.5 years, he had secured a troublesome and quickly fee loan and change into in a position to purchase a house. So the moral to the tale is that even as you are able to't get it to go back off early, there are belongings you may want to do to strengthen you credit status. it is also significant that when you financial ruin that you look into your credit document. be particular that all of your debt is listed as being discharged by potential of the financial ruin. issues which aren't to any extent further listed as such mandatory to be disputed so that they reflect this or are bumped off. After your financial ruin, a tremendous variety of human beings propose that you get a secured mastercard - a mastercard this is linked to a fee mark downs account the position you deposit a particular volume of money and that money secures your card. it is a blinding thanks to construct again your credit. also, this card might want to change into an unsecured card and the money interior the speed mark downs account might want to take delivery of again to you. once you've scholar loans (which aren't to any extent further discharged in financial ruin), you should use those as a fashion of recuperating your credit by potential of creating sturdy funds. you've a tremendous variety of options, yet you should take your lumps, go by potential of the financial ruin and then artwork flat out to rebuild your credit. also, the subsequent time round, basically be particular you once you take advantage of your charge playing cards that you pay them off right away and do not use them except you pays them off. this can practice that you're responsible such as your credit and will strengthen your score faster. wish this permits! i understand how you experience -- i have been interior of an identical boat!

2016-10-17 02:47:23 · answer #7 · answered by ? 4 · 0 0

Seven yrs

2007-01-22 07:52:19 · answer #8 · answered by M♥R 3 · 0 0

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