Charge Offs Judgments Approved Home Loan BOA Raise Above a 620

Charge Offs Judgments Approved Home Loan BOA Raise Above a 620

I really appreciate the information on your site and I have situation that I could sure use your experience and advice on.
    I have had several charge offs that have been sold to collection agencies ( some more than once, I believe)….I stopped paying on all but a few smaller credit cards back around September of 2005. I called and wrote to each creditor to explain my situation and the fact that they had raised my interest rates from around 6%, up to around 30%, because of an error created by Nextcard (which had filed bankruptcy). The agency that took over collection of monthly payments online for them had changed all original account #’s, but without notification to me, which made it impossible for me to gain access at their website to make my regular monthly payments…so, of course, it showed up as late payments on my credit report. As soon as they contacted me by phone from the new organization, I got caught up immediately. That didn’t stop ALL other cards from raising my rates even though I had never failed to make timely payments to them.
    I explained in my calls and correspondence with them that it was not my mistake , that they should put me back on the original interest rate that I had with them and even supplied them with a letter I requested from the company that had created the error that explained that what had occurred was not my fault, but rather an error on their part because they failed to notify all Nextcard customers of the account # changes.
    I had a contract with the UMKC School of Dentistry that required large monthly payments in order to save my teeth ,and the work, including surgeries and bone grafts, and with the interest rate hikes, I struggled to pay as much as I could per month, but only got late fees added to my accounts because I couldn’t afford my new minimum monthly payments. And even though I was trying , I found over time that I crossed my “limit” (without making any new purchases for quite some time) and then I would send a payment, only to find my debt rapidly increasing with late AND over the limit fees. My monthly contract increased with the dental school as they got further into the restoration process…and I simply gave up on the credit card companies that wouldn’t work with me and stopped making payments because I heard that new, tougher, laws were going into effect regarding consumer debt in Oct. or Nov. of 2005.
    I was taken to court by one of the creditors and now have a judgement of a little more than $1200 from one of the creditors that was entered in 2007.
    My only income is from Social Security Disabilty Insurance…..$949/mo.
    I would like to purchase a home for the first time and had been pre-approved by B of A in December ( ironically, they were one of the creditors that had “charged off” a debt with me a few years back). The pre-approval was valid thru Feb 2nd, unfortunately, by the time they got the paperwork to me it was Dec.14th and only days later we were hit with blizzard conditions and I was unable to even get out of the drive, let alone my very small rural town, for an entire MONTH…leaving me only days to locate and decide on a home purchase and get the paperwork done. Now, I’ve contacted another lender and I was told that my credit score was abit under the required 620 to get another pre-approval.
     What is the FASTEST way that I can increase my credit score by at least 20 to 25 points. Does the FICO jump faster from settling small debts or the $1200 judgement on the Public Record ? Should I use a Debt Settlement Agency or do this on my own ?
      Any and all advice that you can provide me will be very deeply appreciated.By the way, I’m in Missouri, if that makes any difference.

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949 a month leaves you only 400 a month to get qualified for a home loan it you have no other debts based on 45% debt to income ratio limits
the best way to improve your credit scores is to pay down balances on current open rated lines of credit.
have bad credit on your credit report removed or deleted by dispute, validation, or negotiated payment.
do you have current open rated (12 months) lines of credit? Like credit cards or personal loans?
What type of Payment did BOA approve you for?
 
as far as paying off old collection public records and judgments
neither is any better than the other as far as I can advise you.
the publis record will show for 7 years no matter
I do however doubt any lender will approve you if you have ANY open unpaid judgment or collection on and of your credit reports
 
 
so you need to dispute, validate, and finally negotiate as best you can.

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Thanks for the response,Bo,
 
    B of A pre-approved me for $48,000+. They were aware of all the items on my credit report ( and I informed them that as soon as I was settled into a home that I will be working out debt settlement solutions on all currently outstanding debt.) B of A said that FHA had dropped its’ Credit Score requirements to 620…thus my dilemma, as apparently, somehow in the interim my score had dipped below that, in spite of the fact that I had recently paid off a small bank loan. I have a $0 balance on a Firestone (FCNB) account that is open and I have a balance of less than $400 on my Target card (my limit on that card was $500 (Those are my only current credit cards). I primarily use my visa/mc debit cards from the banks (ran as credit on purchases) so I “pay as I go” now on almost everty purchase. Would it be beneficial or harmful to open another credit card account ?
    The items on the Public Record remain , even if satisfied? So, if I paid the judgement, it would remain on my report, now marked as “satisfied”, but wouldn’t impact or improve my score ?
    The homes I’m interested in my market (KC,MO) are less than $30,000 and I plan on a 30 yr/fixed loan. I qualify for some upfront grants to assist on downpayment and closing, (because I’m disabled) and also, a loan rep that I spoke to awhile back said that they “gross up” my income because it is Soc.Sec. and isn’t taxed.I was told that I was “grossed up” to around $1200/mo. I would like to also take advantage of the 10% Federal Tax Credit, if I can get my paperwork on a house submitted by April 30th and closed by June.
    It’s currently costing me $400 month for my teeny tiny 1 bdr and the storage fees that I pay. The monthly payments to “buy” something big enough to accomodate me work out to a good deal less than what I’ve been paying in rent and, next fall my rent will go up substantially…so, I really need to move and it’s currently a buyer’s market and possibly the best time for me to buy.
    So far, the lenders have been less concerned about the charged off accounts and collections….possibly because my income , being Social Security, is not garnishable.
Thanks, I really appreciate your input.

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looks like you could pay down your target credit card paid but still a collection or judgment
 
pay the credit card down
then try to dispute or pay off  and get removed    one of the other debts on your credit report
it will help i bet enought to raise your  credit score were you need it

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I can do that and I will try your suggestions about getting “validation” from the collection agencies that have been buying and selling my old debts and possibly propose a settlement offer , as you advised, without claiming the debt. ( I really appreciated the credit card letters that you posted as suggestions). Thanks for your input, I really appreciate it so much. I’ll let you know how it goes.

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