My husband and i are looking forward to buying our first home next summer. So right now we are in the process of getting are credit reports to see what would affect are interest rates and loan amt so we can pay those particular items off faster than the other not as important ones.
I pulled my credit and i dont have any credit card debt but i do have an eviction and a repo and some old medical bills on there from like 4-5 years ago. My husband on the other hand is paying on his car right now which he does pay on time for his car note he is also paying on his student loans but he also has a lot of old credit card on his report from approx 4-5 that are now chargeoff.
We would like to know what type of debt would the lender be looking for that would make us ineligible and also how much of loan can we afford without living paycheck to paycheck and also is there any program that can assit/teach us on what we need to do and payoff to get our first home?
The good news is that there are things you can do to build your credit up.
When looking at credit I always start by getting a consolidated credit report with the credit score option. Use this consolidated credit report link, it’s the same one I use. in fact I just looked at my credit report a few minutes ago.
It is important that you order the credit score option when you get the report. Your credit score will be different with each of the three major credit bureaus since each uses a different formula. But the real bonus of ordering the credit score is that it will tell you exactly what is dragging your score down.
In your case I think you’ll find that the old negative items are a lead weight around your credit neck. And it doesn’t sound like you have any current credit cards that you pay on a timely basis to help increase your score.
Do You Have a Question You'd Like Steve to Answer? Click Here.
The consolidated credit report will give you the contact information of the creditors that are reporting the old negative information about you.
The chargeoffs can be handled by paying them off but the biggest concern is the car repo. I would imagine that might be a big debt owed.
It is pointless to pay anyone for credit repair. Even if one of the old negative items was removed from your credit report it can simply reappear. And if you then used the clean credit report to apply for credit, you would be committing credit fraud.
Those negative items will drop off your consumer credit report seven years and six months from the date they were first reported. But just because they will no longer be listed does not mean that they are no longer collectible.
I would suggest that you find a local mortgage broker to work with on your future mortgage. You’ll need to understand what loans might be available for you with your credit history and you should ask them if you need to take care of paying that repo off first or the credit cards.
Let me know what the mortgage broker says.