FHA mortgage with paid collections?
hi! I recently have been planning to start the mortgage process by feb-mar 2012. I started to clean up my credit and paid off 5 of 6 collection accounts. All the collections are over 2 years old except one. I am paying this last one off in 2 weeks. I paid the first 5 and my scores jumped, i opened two credit cards for building purposes, dont worry, both cards have a balance of $30 each and with high limits. I know one score is 650, second is 629 and 605.What are the FHA guidlines for past collections if they are paid off?....Btw, i was looking at my fico scores from myfico, not fako, also a mortgage company did a free pull and told me my scores by jkelleysroad77 from Portland, Oregon. May 5th 2011
Linda Miller (Linda Miller)
#2 ranked lender in Utah - 572 contributions
You are doing all the right things especially planning ahead and working on your credit. I wish more of my clients would thinking about putting a plan in place before they go house hunting. To answer your question - your middle score needs to be 640. Regarding the paid collections - they shouldn't hurt you at all. You might need to do some type of letter of explanation. I have a service that for $15.00 can usually tell you how to raise your score. This is the company we use to pull mortgage credit reports and they offer this as an added service to us. I recently used them to raise a score by 13 points which helped my client fall into a lower interest rate. Again you are doing all the right things and it just might take a few more months to get your mid score to 640. Call me and let's talk and see if there is any way I might be able to help you. Linda Miller 801.506.3133
MIKE CONVIN (mconvin)
#6 ranked lender in Delaware - 202 contributions
Hi there:We allow a minimum of 620 fico possibly down to a 580 on a case by case and the overall picture itself (assets, debt to income, collateral etc). You are pursuing the correct path in restoring your credit. Continue to do so but if you would like to contact me to see if we can assist please feel free to do so.
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