Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for MonicaDriver

My credit score is 606. Can I still get approved for a mortgage loan?

I am a teacher in Marshfield, WI. I have been at my job for 3 consecutive years. I have a daughter and I am a single mother. All my credit cards are paid, and my mortgage lender said that I am doing everything right and that it's just bad timing and haven't had enough time for recovery. I am looking at a property right now, but am unable to get financing because of my credit score. Does anyone know of a place that can  help me?
  • April 23 2014 - Marshfield
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (10)

HI Monica,

Your 606 credit score does not in and of itself disqualify you.  My bank does not have a minimum required credit score requirement to secure financing. Feel free to contact me through my Zillow profile if you are still in need of assistance.

Thank you,

Brian
  • July 16 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

That is difficult. The automatic lender answer is yes I can help you, call me to get started but 
what your looking fors an honest approach. I would say let's go over your current trade-lines reporting
to your credit bureau, the percentage of your current credit utilization to see what we can improve to 
bump those scores average above 640. You can obtain a mortgage loan through USDA and FHA
as your credit stands now. The rate of interest on the mortgage offered will be higher but it is doable. 

The problem we run into is on manual underwritten mortgages your DTI or debt to income ratio is reduced.It really depends on current income vs what you pay out (liabilities) that are reported on credit.
It is great to here you have had solid job history for over 3 years. It would be wise to take a look into a no cost or obligation mortgage application to determine your current credit score and DTI ratios. 
Manual underwritten loans require much more documentation that automated approvals. 

FHA has mortgage insurance but is a great option for those with credit blemishes. 
USDA (RD) is location specific and only apply to those living in rural areas of Wisconsin. 
Please see attached a simple link to look-up USDA(RD) eligible areas listed directly below:
 
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
 
Hope this information is useful in achieving your goals. Feel free to contact me with further questions. 
  • July 16 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

[self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines][
  • June 11 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Hi,
Checking in to see if someone was able to help you. I'm located in Madison, but can still help as I have loans that use scores as low as 580.
  • June 07 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

It seems that your scores should work. Lenders like myself can go as low as 580 when it comes to credit scores. Different lenders have different requirements, so there are lenders out there that can go as low as 580. Of course, your other finances will need to be in place as well including your income, debt, assets, employment, expenses, etc. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!  The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • April 23 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Gary DiFilippo

I am a Senior Consultant with a National Federal Savings Bank, and just yesterday closed a loan for a customer with a middle credit score of 603, so yes, it can be done! The requirements are a bit stricter regarding source of your down payment, as well as you debt ratio. I would be happy to speak with you about your specific situation, and answer any further questions you may have. You can reach me through my profile at anytime. Thank you and I hope to have the opportunity to speak with you soon.

Gary DiFilippo
Sr. Federal Lending Specialist
 

  • April 23 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Hello Mrs. Driver, you can contact me I would be happy to assist you and give you the right direction.

Best Regards,

Diego
  • April 23 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am a mortgage broker in the State of WI and YES I could work with you with a 600 score. Feel free to contact me.
  • April 23 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Good morning MonicaDriver,

Thank you for providing so much detail in your query.  First, your score is probably too low for most Lenders.  620-640 seems to be the guiding standard currently.  Second, because your score is 606 it seems you are not so far off the mark.  You'll need to commit to an Action Plan to work on increasing that score to a sufficient level, and I'm sorry your current mortgage lender didn't advise you on a course of action.

The Action Plan may take only a few months or may take a few years depending on the nature of your total credit history.

When you say "all my credit cards are paid" I don't know if that means they are paid off to zero balance and CLOSED or if they are paid on time with current balances.  Typically we like to see at least 2-3 active accounts open and active with balances for the most recent 12-24 month period.  If you're not meeting that minimum standard, that might explain both your low score and your inability to qualify at this time (according to one mortgage lender).

Here's the course of action I recommend:
1. Locate and meet with a LOCAL Mortgage Loan Originator (MLO), someone with at least 15 years experience.  Meet in person and let the MLO review and advise on your TOTAL loan qualifications: Income, Assets, and Credit.   The total review is important because there may be other factors the MLO can use to bolster and strengthen your loan application.
2. If the new MLO concurs that you are not qualified due to a lack of recent, adequate credit history, then I suggest you check out Consumer-Action.  This is the absolute best not-for-profit organization to provide consumers with clear advice on creating and improving credit histories.
3. Beware of "credit repair" companies: they are scams according to the Federal Trade Commission.  They'll take your money and waste your time.

I hope that helps you!
Trevor Curran
NMLS #40140
  • April 23 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I wish I originated loans in your state so I couls help you . What you need to do is find a lender that has a porfolio loan product that alows credit scores as low as 580 . They are out there you just need to do some research. I am sure someone onthis site will be able to assist you as well. 

Good luck and best wishes!

-Scott 

  • April 23 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.