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One year to buy a house with a low credit score

Hi,
I currently have a TU 562 (ugh) credit score but a 611 vantagescore.  Someone I co-signed for defaulted on a car loan, which was repo'd back in Oct 2013.  I have about $900 left to pay on it and then it will be done but I know it lasts for years longer.  My current car payment is current as well as some revolving credit I have.  I do have a judgement on my account which isn't mine (I sued someone, I won but the judgement is backwards on my credit) and so far, only TU has removed it.  I also have some medical that probably hurts me too.  I am hoping to buy a house early 2015.  I have been at my job for 2 years and make a decent salary.   I am hoping to save $3k between now and then to use as a down payment.  I found a great house for $102k in a neighborhood I love but doubtful that one will be around in a year.  My question is, if I pay off that repo and get that judgement off the other credit reports, what are my chances of getting a house with 3.5% down in Jan or Feb 2015?  Can closing costs always be rolled into a mortgage?

Thanks

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April 10 - US
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Answers (4)

The scores that you should pay attention to should be your three FICO scores from Transunion, Equifax, and Experian. When it comes to these scores lenders like myself can go as low as 580 when it comes to credit. There are other financial factors that would need to be analyzed including your income, expenses, assets, liabilities, debt, employment, down payment, as well as credit scores. If all of these factors are in place then you should be good to go. So 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!
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April 10
You would be surprised how quickly you can get some of these items removed just by working directly right away with an experienced loan officer. If you have documentation on the judgement, that will help tremendously. It sounds like you would benefit from a professional review of your current credit and some specific things you can work on to get your scores to the 620+ range. Feel free to reach out if you would like to discuss in more detail.
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April 10
You sound like you are doing all the right things getting the negative accounts cleaned up.  Most of the time lenders indeed do require a minimum of a 640 score.  Another suggestion would be to open up some new credit cards, a few local department stores.  Charge something small each month and pay on the balance.  This should also help improve your score since it will show new accounts on your report and your ability to pay them on time.  More current information will more than likely help improve your score and put some of the past in the past.
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April 10

You are doing all the right things now to buy later.

Staying on time with current debt will help your scores as well as keeping your lines of credit below 30-40% of our limits. Fixing errors and having your medical collections deleted from credit (not just paid off) will also help you tremendously. I refer my clients to a local credit repair company that does an amazing job! Many lenders need a 640 or higher score, but some are able to do tFHA loans below 600, albeit more documentation is often required.

Bottom line your chances are great if you keep doing what you are doing.  

High 600 fico scores is a very real possibility for you.  Saving your downpayment will also show you are capable and responsible enough to own a home. Good Luck to you!

 

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April 10
 
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