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Old 01-09-2013, 09:14 AM
 
194 posts, read 369,584 times
Reputation: 166

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I have a bad credit history (I once owed $25,000 in debt!). No bankruptcy, but I've been spending years paying the debt off through debt management. In some instances, a few accounts DID go into charge-off status. They didn't go into external collections, and I negotiated with the creditors to pay *less than the agreed amount.* Those notations were not removed from my credit report and happened just a few years ago, so they will be on my report for several more years.

Anyway, I will be debt free in about 18 months ($5000 more to pay off). The last time I checked my credit score was 644 and that was just recently. I am hoping to buy a condo later in 2013 (sick of paying $1200/month for an efficiency in DC! not worth it). Given my credit history, do I have ANY CHANCE of being able to get approved for ANY type of mortgage in 2013?

I went to a Wells Fargo CityLift event in Oct. and they had to send my application to underwriters. They never contacted me with the results until I started hounding them at which point they finally fessed up that I couldn't be approved. They didn't say why.
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Old 01-10-2013, 09:04 AM
 
3,672 posts, read 6,793,754 times
Reputation: 4254
my credit score is only slightly higher than yours and i was approved, though not at the best rates. with a little more time i'm sure you'll be fine provided you're buying conservatively and have the income and downpayment and stuff
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Old 01-10-2013, 09:12 PM
 
Location: MID ATLANTIC
8,407 posts, read 21,593,206 times
Reputation: 9903
As long as you have been on time with payments in the past 12 months, your CCCS adviser supports your purchase and you have completed or released from their program (debt management is viewed as a Chapter 13 that did not go thru the courts), you should be fine. Settling for less than the original debt is the same as a paid in full.....so don't sweat that. About 90 days prior to starting the hunt, have a lender pull the report (and make sure they will share it with you before you give the okay).
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Old 01-15-2013, 10:43 PM
 
3,805 posts, read 8,834,284 times
Reputation: 4976
Your score is fine. However, you will have to have every Dispute removed from every account, and your total dollars in collection must be less than $2000. At that point, pending 640+ score, and debt ratio qualification, you will be fine.

I just closed a similar file wherein we had to get 26 Disputes removed. It was a headache, but we got it done in 6 days. You are closer than you think!
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Old 01-16-2013, 08:17 AM
 
194 posts, read 369,584 times
Reputation: 166
By *total debt in collection* do you mean the total amount that was discharged? (that I didn't pay). Because I'm pretty sure it was over $2,000.

And I don't know if I can get the "disputes" removed. I thought you could only get ERRORS removed from your credit report? These are (unfortunately) legitimate charge offs. Even though I settled them with the creditor, they can't be removed from my report.
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Old 01-23-2013, 10:10 AM
 
Location: NW Indiana
43,256 posts, read 18,161,936 times
Reputation: 111100
Kudos to you, OP, for climbing out of your financial hole! You're on your way.

I know a young couple who just obtained a substantial mortgage on a house, and only a year and a half ago the husband's pickup truck was repossessed for the second time because he was behind on his payments. The couple was not yet married when the pickup was repo'd. I don't know what their credit score is, but I was really surprised when they announced that the bank approved them. The wife just finished graduate school in May and started her first teaching job in September. They closed on their mortgage loan on December 31, 2012.

Perhaps there is more hope for you than you thought!


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Old 01-23-2013, 11:56 PM
 
27,905 posts, read 59,798,080 times
Reputation: 22756
Never say never...

More ways to buy besides a traditional mortgage...

I've bought a few homes with seller financing and it has worked out great for both parties...

The one I still have is from an elderly couple and they depend on the mortgage payment from me to supplement their Social Security to pay for the retirement home where they live now...

My payment is always hand delivered by or on the first of the month... just 4 more years and it's paid for on a 15 year note.

My brother is a Real Estate Broker and just sold a home where the buyers had the worst credit... really bad.

They came into some money and put down 50% and my brother found a hard money lender for the other 50%... downside is the rate is 9%

They do have the option to refinance so a lot of it is on them if they can improve their credit... so the 9% might only be for a couple of years.
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Old 01-24-2013, 09:26 AM
 
194 posts, read 369,584 times
Reputation: 166
Quote:
Originally Posted by PJSinger View Post
Kudos to you, OP, for climbing out of your financial hole! You're on your way.

I know a young couple who just obtained a substantial mortgage on a house, and only a year and a half ago the husband's pickup truck was repossessed for the second time because he was behind on his payments. The couple was not yet married when the pickup was repo'd. I don't know what their credit score is, but I was really surprised when they announced that the bank approved them. The wife just finished graduate school in May and started her first teaching job in September. They closed on their mortgage loan on December 31, 2012.

Perhaps there is more hope for you than you thought!


.
Thanks, I've worked very hard to pay it all off. I'm even planning to quit my 2nd job in about a year (I'll be debt free in about 14 months). I could actually afford to quit now, but I don't think that would be wise. I can't wait to get my weekends back. I've been at the second job now for SEVEN YEARS.

The caveat of all this is that I have NOTHING for a down payment. Zilch. All my money is paying the debt off. There's a program here that basically covers all your downpayment and closing costs, than you pay back the loan starting the 5th year. It's very low interest and they give you 40 years to pay it back. I'm hoping to combine this with maybe an FHA loan but I have yet to learn about the different types of mortgages. But I'm thinking with my credit history that would be the easiest one to get.

I'm not looking for anything fancy. Just a Jr. 1BR in a halfway decent neighborhood where I'm not gonna get shot in the head on my way home from work.
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Old 01-29-2013, 12:13 PM
 
Location: New York
2,251 posts, read 4,705,845 times
Reputation: 1617
My $00.02

When I was a loan officer used to repair peoples credit, raising their score high enough to be approved for a mortgage. I respect your intentions about your goal to raise your score, but you need to understand good credit doesn't happen over night....

I can understand your situation - before financing world, was self-employed making sick money. All that changed after 9/11/01, the world trade center bombing. Lost my contracts, became 6 months late on my mortgage, $95,000 in credit card debt, and my credit score tanked in the low 400's. Fast forward to today, my house is paid off, get a new car every two years, a few thousand in owed in revolving debt, my score is over 800. Earning 10% of when I was self-employed, my secret is not spending beyond your means, but paying more than the required payment (especially paying extra on installment debt).

Paying off your debt totally is not a good idea, making payments and managing monthly payment is better because your credit score is a report on how you handle your money. If you pay off everything, over a short peroid of time your credit report can show an N/A score.

I suggest you learn what credit is -


Your credit score is rated on 5 points
1. 35%- Your Paying History
2. 30%- The credit available to you vs. how much of it you use
3. 15%- How long you’ve had credit
4. 10%- The variety of credit you carry
5. 10%- The number of “hard inquiries” from creditors

1) Payment history - by making more than the required payment, you get reported as being more responsible.
2) Credit available - credit cards, keep balances below 50% of credit limit, 25% is better.
3) Start your quest for good credit when your young. Waiting till your later in life, makes it harder to get your score higher.
4) Having different types of credit - credit cars, car loans, secured loans, car loans, mortgages (a wide mix).
5) Credit pulls - you running your credit is considered a soft pull. Having too many people (hard pulls) pulling your credit report in one month will take your score down.


Good Luck....
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