credit score of 515 can i buy a house next year?

Question

I am working on raising my credit score i know it is bad and i have many things on my report that look horrible some very old 5 years or more i am working on the small stuff first if i don't get all my old debts paid by june of next year when i want to apply for a loan can i still be approved or not? how long would it take to fix it well enough to be offered a mortgage loan

Answer 1

As you may or may not know it is very difficult to buy a house now for people with low credit scores (less than 700.) The stock markets are falling and companies are failing because they lent money to people who were not creditworthy at ridiculous rates they could not afford. So to be blunt you don't have a lot of opportunity now as it stands, but that's not to say there isn't hope. First let me say that for you it may be cheaper and more financially sound for you to rent until you either get a better credit score or the housing economy improves again (which can take years). Fixing your credit score though won't take as long so focus on that for now.

It doesn't take long for short term changes like account balances, payments, and available credit to show up on your credit report and effect your score -- likely these are the things to have impact over the short term, and you have a better change of fixing your score if you try to address one of those issues, which you can do easily in a matter of weeks.


Let me share with you my tips that you can use to build your credit score quickly. I raised mine to well over 700 points fro 500 using these steps in less than a year -- :

# Know and Track Your Credit Score (be sure to sign up for the free trial of your credit score tracking listed below. It really helped my get my score up.)
# Never Miss a Payment, Starting Today
# Never use more than 20% of your Available Credit
# Keep Credit Cards that Have No Annual Fees Open For as Long as Possible
# Extend Your Credit Limit on Cards You Already Have before You Get New Ones
# Get Credit Cards that Have CashBack Rewards to Contribute to your Balance
# Transfer Your Balance to a Credit Card with a Lower Interest Rate and a Higher Available Credit-
# If You Think You Are Going to be FORCED to Pay a Bill Late Ask for an Extension or Payment Plan
# Take out a Small Personal Loan and Repay it Over a Year
# Ask Someone With Good Credit if They will Account Shadow you

Read more here:
10-Ways to Boost Your MyFico Score
http://millionster.com/articles/debt/increase-fico-credit-score/

When you're trying to build a solid credit score it's important to get a comprehensive view of what is actually effecting it...
Your Credit Score (also known as your MyFico score) is calculated with the following breakdown:
35% - Payment History
30% - Credit to Debt Ratio
15% - Credit History
10% - New Credit
10% - Credit Types in Use

If you excel in one area and lack in another, only fixing the areas which you lack are going to improve your score

Best of luck to you, I hope this info helps you figure your credit situation out!

Answer 2

For a large purchase such as a house you should be in the mid to high 600s to get a reasonable interest rate. The best way to raise your credit rating is to get a credit card (it doesn't matter what the limit is) charge some stuff this month make the minimal payment next month and pay it off the month after that. That raises your score quick because it shows up as dept paid in full. It is as if you took out a loan and paid it off because the report doesn't show a dollar amount. But as for buying a house I would try to get your score up to high 6's low 7's. Just be carefull there are alot of lenders who will set you up with a loan that's not the best deal for you with a floating rate. Be care full and good luck with your house

Answer 3

It really hard to stay what the market will be like or what programs may be available next June. You may be able to go FHA, at this time there is no minimum credit score requirements, however, that may change. However,FHA does require a demonstrated ability to manage credit, willingness to pay bills timely including the most recent 12 months of rent payments, and a pattern of ability to save money. FHA requires a borrower to invest 3% of the purchase into the transaction. The maximum debt to income ratio is currently 41% of which housing ratio should be 29% of your stable gross monthly income. (ie; you make $1000 per month, only 290.00 can be your mortgage and you can have an additional $120 per month in other debts-not including utilities) Below is a website for HUD/FHA which will give a lot of additional information and home buyers courses that are free and highly recomended. Hope it helps!

Answer 4

Your best bet would be to go through an independent mortgage broker they can do all of the foot work for you and they also know how to work with sub prim credit lenders. Just be sure you get a fixed rate mortgage in stead of an adjustable rate mortgage.

Answer 5

Your score needs to be 630 before you will even be considered...

It might take more then a year to get there. Keep paying off old debt and save enough for a good down payment.

Answer 6

As answered the last ime you posted this...

Sounds like you have a lot of work to do before you need to start worrying about buying a house. Pay off your debts, save up an emergency fund, save up a downpayment, etc.

Answer 7

If you have allot of closed accounts, write offs, and bill in collections they will stay there for 7 years after the last activity. If you can come up with 20% down, and closing costs that gives you some leverage, other than that in todays market, not much help, or choices.

Answer 8

You can, but you will be paying out the butt in interest. May be your best bet to get an intrest only lone for the first five years which will have lower payments. then once you astablished a good credit history paying on the house refinance. it is a bit of a gamble though. depending on what the intrest rates are in five years.

Answer 9

I'm glad to hear that you are beginning the repair work now. In addition to working on the small stuff first, have you given thought to getting some of the negative things deleted? Please feel free to email me if you wish to discuss it.

Answer 10

Not anymore.

Those days of cheap, easy mortgages are gone as of weds this week.