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Loan Qualification with 580 FICO

I had a question about qualifying for a loan with a 580 credit score. I went through a credit restoration service and my scores jumped about 100 points. My mid-score is currently 574. I have gotten a lot of advice on how to further raise my score to qualify for an FHA loan but most has been very conflicting. I am very scared to settle any debts or do anything credit-wise for fear of doing the wrong thing and harming my score again. Does anyone know of lenders that work with these types of scores or can give good advice on what exactly do approach on a person's credit to raise their score to where it needs to be to qualify?

Thank you!
  • August 07 2013 - Los Angeles
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Answers (3)

If you have a credit score of 580 your interest rate will be higher than what someone with a better rating would qualify for. The less debt you have, the higher your income to debt ratio gets. You want to make sure you can afford your mortgage, first of all.
Focus on getting your credit score slightly higher. How? Pay more debt down. Or make a purchase on your credit card and pay it off completely when you get the bill. Those are quick ways.
If you have a lot of debt, let's say 5 credit cards, a student loan and a car. Focus on one thing at a time, like the card with the highest interest rate (probably a credit card), or perhaps the item that costs the most a month (a car), or the one that has compound interest (student loan).
When you focus on paying down one item at a time, its called the snowball effect. Your interest is being charged to you every month and your minimum payments barely go toward the principal payment. When you pay minimum payments to one card and one large payment to another, that card will be paid down quickly and then that debt is gone altogether. Then focus on something else, when that's gone, focus on something else. 
The trick is to really focus on one thing at a time and NOT build more debt.
You can qualify with your credit score but if you are looking at a long term loan (30 years), it wouldn't hurt to pay down a couple grand or save a couple grand and pay to have points taken off your loan.

Best of luck!

BA in Economics
Real Estate Agent
Insurance Sales Agent
  • October 01 2013
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Luckily, there are lenders like myself that are able to give out loans with credit scores as low as 580. It's just the matter of finding these lenders that fit you. Lenders like myself would be glad to speak with you to help you get the loan that you need.

Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me!

Good Luck!
  • September 30 2013
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I am a Mortgage originator and the lowest score I can get you qualified  for a loan  is 580 mid credit score   
Contact me and I can talk to you more about it
  • August 07 2013
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