Quote from SnowymtnRN
OK we've in the last year bought a minivan, and have never made late payments on it. BUT there are 2 debts that i have recently found out will be on our credit. One is a cell phone bill that is hyper inflated (we owed $400, they say $1600 whatever) but i just sent a certified letter to try to settle it for the amount owed. The other is our old residence, we left our apartment and gave 42 days notice due to my DH's employment. We had to move out of state for his job, and gave notice but they require 60 days notice. So they want basically $1400 (one month's rent) to clear our debt. I'm sending them a letter to offer to settle it. The rest of our credit is old credit card debt and other minor things. No bankruptcy or anything, a paid judgement (medical bills believe it or not while we were in RN school) and that's it i think. I need to order our credit report to really KNOW everything on it. Any thoughts?
Well, you might be OK. You definitely need to get the credit report and see if these items are on the report. If they are, the good news is that it's easier to dispute items like the cell phone bill and landlord debt since they're collections. BUT, easier doesn't mean easy. It still takes some work and time.
You can either negotiate with the collection agency or debtor to remove the report as part of any settlement you can work out. If that fails, you can also dispute the item with the three credit bureaus. Basically you contest the debt through letters (or online), they investigate, and you can sometimes remove it that way. Usually if you dispute collections, persistance pays off. If you don't remove it the first time, don't give up. Keep writing letters to both the collection agency and the credit bureaus contesting the item.
Generally, if your credit report shows no deliquencies for two years, and if your credit score is 620, you can qualify for a mortage. If your credit score is lower than 620, then you're looking at higher interest rate deals or, perhaps, government guaranteed loans like VA, FHA, etc. if you qualify for those.
I suggest obtaining your credit report right away and working on removing the items you think you can dispute. Then start shopping for a mortage broker who can give you lots of options. Preferably someone reputable who works on loans for bad credit borrowers. Although definitely shop around. Don't just rely on one mortage broker.
On the other hand, if you do shop around, don't let too many brokers run your credit until you know for sure which one you want to work with. Too many credit inquiries can also hurt your credit score.
The good news is that you don't have a foreclosure or bankruptcy, and that's half the battle right there. And, as previously mentioned, if you can make a 20 percent down payment, that helps a lot as well. But most people don't have the cash for that.