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I have a 607 credit score, can you steer me in the right direction to get a loan

  • March 01 2011 - Adrian Township
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Answers (11)

Alex,

Is sub 600 possible...sure but when you seperate what's possible from what it likely to happen...sub 600 would be a real stretch...although technically available it requires a manual underwrite and I too have scene very few sub 600 credit scores that would have enough compensating factors and/or extenuating circumstances that would make the approval likely. 

It drives me crazy when folks promote obtaining financing with extremely low credit scores rather than recomending clients resolve the credit issues that are causing the low credit scores, before tackling a huge financial obligation.  Nothing like placing your commission before the clients best interests!
  • March 01 2011
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Hi Mike, Absolutely! you can get a loan with your credit score as long as you have good employment history and debt ratios.  The lower your credit score is the more strict the conditions are.  Well Fargo has several loan products from the 500 credit score.  Good luck! 
  • March 01 2011
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They will, however, it has to be reviewed by an exception desk and requires 5-10% down versus the minimum 3.5%.  And, I personally don't see a lot of buyers under 600 scores that have a lot of compensating factors.
  • March 01 2011
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I just read an article in Realtor Magazine that said Wells Fargo would consider people who have credit scores from 500 and above.
  • March 01 2011
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It's important to note too, pricing adjustments can vary by region.

Plus, a 1/4 point is thousands over the life of the loan. Paying a credit company to boost your score would cost only a couple hundred dollars instead and would improve your score across the board, not just for the transaction - as a rapid re-score does.
  • March 01 2011
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Wells Fargo will go down to 600 and the adjustment to the pricing for scores under 620 is very small.  The pricing adjustment for a score <620 is 1/4 point.

Good luck.
  • March 01 2011
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The number one thing you will NOT want to do is apply to open new credit. New credit inquiries will help LOWER your score. Obtaining credit is not the solution to getting a higher score, it is the use and management of credit that raises scores.

Additionally, depending on where you got that credit score from, the score you receive when applying for a mortgage will vary. Credit scores are weighted based on the inquiry. Consumer reports you get from freecreditreport.com and the like, are not always the best for determining your credit score for a particular transaction; such as a car, or mortgage. 

The best thing you can do is find a credit company that can assist you in raising your score. Raising a score involves the removal of stale and inaccurate information from the report - this process alone can raise your score 20 or 30 points. You can also open secured credit cards with as little as $200 down - a good credit advisor can help you locate those opportunities.

FHA or VA, if you're eligible, would likely be your best option. Settling for a loan with a score under 620, even under 640, will not get you the best rate you can qualify for.
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MIke,

I have been told that Wells Fargo may go below 600 on an FHA loan. I would give them a call.
  • March 01 2011
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You might want to try and find a loan officer that can guide you to a higher score as you are virtually knocking on the door!

Otherwise, I'd recommend opening a new credit account if you can.  If you are denied one, then you should consider a secured credit card account.  Depending on your credit history, you might see 640 in 3-6 months or so. 
  • March 01 2011
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Hi Mike, hope all is well. I recently helped a similiar client obtain a credit sscore in order to get approved for a mortgage. We increased his credit sscore by 35 points in order to get him above a 640. If you would like direct aadvice or assistance with this offline, please let me know. I like to keep my secrets safe from the competition ;~)
JD
  • March 01 2011
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Most lenders require a 620 or higher however there are a few places that will go down to a 580.  FHA is going to be your most likely option with the least money down.  You MIGHT want to work on increasing your score as it will lead to better rates and payments while you are looking for a home but to answer your question.....yes, 607 will work.   
  • March 01 2011
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