Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Site Suggestions
Profile Image

Question By
ANTAK17

0 Contributions
0 People Helped
MARRIED COUPLE WANTS TO BUY A HOME!
My wife and I are looking to buy a home at the end of the year and the lender said that we both need a 640. At the present I am at 475 and 533 TrainsUnion and Eq, respectively. What can we do? We are willing to pay and work on this.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
653 Contributions
288 People Helped

Without knowing your full credit history no one here can tell you exactly what to do.  Getting down your utilization is generally the quickest way to improve score, under 10% is the best and if you have high now you can raise a lot on your score with just that.  Review closely all of your records and make sure they are all correct, if not, dispute them with the agency that has them wrong.   You do NOT want to be getting new lines of credit or increasing any debt at this time.

Top Contributor
546 Contributions
244 People Helped

I can tell by the 640 minimum that you're shooting for an FHA or VA mortgage, and they're right... most reputable lenders require at least 620 for normal homes, and 640 for pre-manufactured ones. 
--

There are lenders that will do VA (not sure about FHA) for scores as low as 580-560, but you end up screwing yourself by doing that; these lenders will set you up with a lower score, but they charge far higher interest rates (up to 10% or worse!), which kills your purchasing power, jacks your mortgage payments to sky-high levels, and is a miserable deal overall. 

--

Your best bet is to try and rehabilitate your credit score. If you have open collections with deliquencies, try to get a 'pay for removal' with the collection agencies, where you pay the balance in return for them removing the derogatory reports - this alone will bring your scores up a lot. If you don't have credit, get secured credit cards (at least), where you deposit $500 or so with the card issuer, and in return they give you a credit card with a limit to match what you deposited with them. In all cases, it will take time for your score to come up, as long as you make regular payments (and don't miss any!) on all open accounts that you have. It will take 7 years for most bad stuff to fall off your credit reports, 2 years for hard inquries to fall off, and 10 years for Chapter 7 bankruptcies to fall off. 

--

Long story short, with scores that low, it's going to take a lot of time and work (and faithful payments) to bring your scores up, but doing that before you buy a home is well worth it in the long run.

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.