Trying to purchase 1st home FICO under 500

[tbrooks]

I am trying to purchase my first home and my FICO is under 500.

I have paid off all of my collection accounts except for 1 which is $2,186.00 they are not willing to take a 50% settlement which I offered. It is a 3 year old charge off that they report every month pulling down my score.

I even had 3 accounts deleted. Only one of my scores went up and that was EQ by 7 pts.

Can anyone provide me any advice on what options I may have besides waiting 12 months for my credit scores to go up?

Also, do I have to pay this account off to close on a mortgage?

Thanks,

[94B10]

It looks like you're off to a good start. Do you have any positive tradelines as well. It's great you're getting negative things removed ,but you also need positive ones to start rebuiling and balance things out. Also you may want to look at the pfd(pay for delete) thread especially if you're willing to pay this.You don't want to pay and not get it removed because a paid collection is not any better.

http://www.credit-repair-forums.com/...ead.php?t=1033

Originally Posted by tbrooks

I am trying to purchase my first home and my FICO is under 500.

I have paid off all of my collection accounts except for 1 which is $2,186.00 they are not willing to take a 50% settlement which I offered. It is a 3 year old charge off that they report every month pulling down my score.

I even had 3 accounts deleted. Only one of my scores went up and that was EQ by 7 pts.

Can anyone provide me any advice on what options I may have besides waiting 12 months for my credit scores to go up?

Also, do I have to pay this account off to close on a mortgage?

Thanks,

[tbrooks]

Thanks :-)

I asked for a deletion they gave me some sad excuse; according to the fcra because it's a legitimate debt it can not be removed.

Also, I have a letter that a creditor gave me by mistake for a debt that I paid in full it states paid in full in good standing yet it was a collection. Once I disputed it they are still reporting paid collection. How can I use this letter to my advantage to have it updated as paid in full in good standing?

Is there anyway to dispute and have negative accounts deleted prior to 7 years after settling and or paying in full.

[harleynana]

Well lets see, the bill you have on your credit will drop off in 4 yrs but you really need to have your credit up to at least a 500 to have a chance at a decent rate. also if this bill is not a child support payment they wont make you pay it off. you will need to save at least $10,000.00 for closing cost. and it would be a good idea to have at least 6,000 in a savings account for seasoning. thats part of most deals and they want it there 3 months before you go into a deal. Sounds like you are on the right track to cleaning up your credit.
Good luck your loan officer
Harleynana :)

[kevin]

Depending on your predicted monthly payments, you ONLY need 2 months of PITI(Principle, Interest, Taxes, and Insurance). Closing costs can be wrapped into the back of the loan, saving the borrower plenty of money. In regards to getting a home, even if you get your FICO score above 500, you may still need 20% down. Lenders are raising their requirement for new home purchases to 600, although there are lenders that will take 580 but the rates are usually higher. I also agree that you do need positive tradelines, which will help you improve your score in the long run.

[salesbiz]

Kevin,
My fico is 545. I have been pre-approved for refinance from Countrywide at 10%.
Can I do better than that?

Thanks
Ron

[kevin]

First of all Countrywide won't do a 545, so you must have been referred to Full Spectrum Lending, which is a sub-division of Countrywide. Countrywide does only "A" paper loans. If you are putting 20% down, you can get a rate 1-2% better than 10%. Are they qualifying you for 100% financing with a 545 FICO score?

[MichaelG]

Originally Posted by kevin

First of all Countrywide won't do a 545, so you must have been referred to Full Spectrum Lending, which is a sub-division of Countrywide. Countrywide does only "A" paper loans. If you are putting 20% down, you can get a rate 1-2% better than 10%. Are they qualifying you for 100% financing with a 545 FICO score?

You're not aware of Countywide BC? They also do non-conforming. Full Spectrum has shut down their operations.

[salesbiz]

It is Countrywide...

The loan is 85% LTV.

[kevin]

I'm showing around 9% unless your score is 550, with that I see 8.35% to 8.75%