Appt with Sibcy Cline tomorrow for home loan

[daneyb]

My husband and I have an appt with Sibcy Cline tomorrow for a home loan. We are 8 months out of BK (from discharge date). My husbands score from Equifax was 610, mine was 570. We have disputed all the information, and it has all been corrected as of this month. I know our scores have not gone up in a month.
We have $10K to put down on a house, is it even worth going to meet with this lady? She is charging us $18 to pull all 3 reports and scores, but that's going to show as an inquiring, pulling our score down again.

I really really want a house, but not at 10% interest. Any mortgage people out there with advice??

Thanks
Daney

[HHM]

You might want to wait a few months, let the corrections work their way through the system. Your target score is 660 as that will get you out of sub-prime category.

Also, inquiries really don't pull down your score per se. It depends on what the category of inquiry is for. The formulas account for inquiries within a short amount of time and allow for shopping around.

As a general rule, most persons should wait 12 months after discharge to attempt to purchase a house.

Also, what, if anything, have you done to rebuild your credit? Are you still making car payments? Do have secured credit cards that report to the CRA's and are you using them and making the payments.

[daneyb]

We have student loans (that are still deferred) showing up as "Pays as agreed". But that's all really. Will that help our credit?

I think we will wait too. I think we can get a decent credit score by December (which I heard is the best month to shop for houses anyways).

Now that I've got someone listening!!!

1. Do lenders take an average of all three credit scores to determine home loan rates?

2. My husband and I were thinking of borrowing $500 against each of our cars (one loan for him, one loan for me) instead of doing the secured credit card. Is that a wrong move? (They already have full coverage on them). Or should we just get a secured credit card?

Thank you in advance!!

[HHM]

As to number 2, it depends on who you get the loans through. The whole point of borrowing to rebuild credit is that the account and the payment history needs to be reported to the Credit Reporting Agencies, otherwise, its a pointless transaction. Most Car Title Loans are not reported unless its with major banks, but most major banks do not offer title loans.

I don't know the answer to number 1. Actually, there are special scores that mortgage lenders use.

It appears that why your scores are still relatively low is you haven't done anything to create a positive payment history (which is a major factor in credit scoring). Yes, student loans are helpful, and they may report them as paid as agreed even while in deferment, but you haven't actually made any payments, because they are in deferment, so there is no payment history (which is a seperate factor in the credit score).

Anyway, the long and short of the issue is, you need to get sometype of loan or credit card (secured or otherwise) THAT REPORTS to the Credit Reporting agencies. Charge a small amount $100-$200, and pay the minimum payment until that balance is paid off, then do it again, etc etc.

[daneyb]

Okay, I got ya.


It will be a year in July, so maybe we'll shop around for a loan then. That will give us 4 months to have all the errors fixed and hopefully the score will go up.
Do you have any type of estimate as to how much a credit score can go up month-to-month? It's it feasible for the score to jump 10 points in one month, or is 1-2 points more realistic? (If we both received secure credit cards in our names this month and paid them on time).