We Need to Raise Our Credit Scores So We Can Buy a House with a USDA Mortgage. – Amy

“Dear Damon,

Been married for almost 6 years to a spender…I am the saver. my hubby has matured now, so he is ready to set our credit straight. On my credit, I have a few cell phone agreements that I broke, a repo on a truck, medical bills, and two credit cards….all of this sent to collection companies, and all within the past 1- 6 years.

I want to start getting things straight so we can start preparing for a major purchase (house) I know that sounds crazy, but it is to the point where buying is cheaper than renting. I have already spoken to a mortgage consultant, and we qualify for the income part of the USDA loans, but we need to raise our credit score.

The fella suggested a credit repair company that he is “partnered” with, but I would much rather put the money we would be paying to better use…like towards past debts or savings. My current scores are 506, 553, and 467. Will paying off my past debts help increase my score and what else can I do to re-establish my credit? According to the mortgage consultant, I need a 640 on 2 of the 3 credit agency reports. Where do I start and what do I say? I have my credit report from the mortgage consultant, and I can send it to you if you like. I am so lost on what to do…


Hello Amy,

Having to legally raise your credit score 140 points or so can be a pretty tall order. Yes, taking care of any past due obligations that are still reported on your credit report will be likely a pre requisite to getting a home loan. Even if your score is good enough, no lender likes to see outstanding past debt and collections and will want it cleaned up. Other than that, the things you can do to improve your score are actually pretty simple. You want to minimize the negatives and increase the positives. Ok, that was easy, now how do you do that?

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Well you start with the negatives. If there is anything that has been reported inaccurately and is negative, you can file a dispute with the credit bureau that it was reported to. Sometimes it will get removed and sometimes it won’t. Sometimes there is no way to remove a negative other than to wait until it falls off your credit report. Anything that is over seven to seven and a half years on your report that is negative, you should not have any problems getting it removed.

The positive things that you can do are of course to make sure you maintain good credit moving forward. You can also start adding positive trade lines to help rebuild your good credit history. With your credit score you might have to begin with getting secured lines of credit and then building up to unsecured lines as well. There is no magic bullet to increasing your credit score and there are plenty of books and a ton of free information you can find by doing a google search to learn the specific steps of how, when and why to dispute an item on the credit report.

The main thing is that good habits over time will have a positive effect on your credit, and rebuilding your credit is not going to happen quickly. It may take 2 years or so to get your credit where you need it to be.

Damon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at DamonDay.com

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