Need some Expertise Advise! Goin' crazy on a Mortgage app!!

[jules79]

Hey All,

I am in the process of purchasing a home by 07/01/2024... (Long story short) Grieve, COVID, and life haven't been fair in the last 5+ years. I defaulted on my earlier credit cards and plunged from an average Fico of 811 to 592 on all 3 CRAs. I need help with how I can increase my scores in the next 2-3 months... Here are my current issues: I will narrate my story with a Hollywood western movie title by one of my favorite actors, Clint Eastwood.

The Good: (All paid on time/Never late)

* 2 Credit cards = both @ $0 bal with Credit limits $1000 & $600 (opened/since 2021)

* 1 Personal unsecured loan = bal $3000 (o/s 2022)

* 1 Bank LOC = @$0 bal with a credit limit of $250 (o/s 2022)

* 1 Student Loan = bal $15k (o/s 2018)

The Bad: (Two 30-day late twice, Both occurred in 2021)

* 1 Auto Loan = BAL @$5400 (recently submitted a goodwill effort to delete due to COVID)

The Ugly:

*  8 cc with a total debt of $129K (ALL Charged-off, which Falls off in mid-2025 after 7 years of reporting)

*  1 Collection of $24K.(Falls off in mid-2026)

Miscellaneous (worth mentioning)

* Last credit inquiry on 10/2023 in the last two years

* Last new account opened = 10/2022 

* NO Public records

My dilemma is as follows:

(1) Am I just SOL with my current situation since I can't put forth the money to pay down those C/O credit cards?

(2) Should I ask for an authorized user on a family account? Will that even help BOOST my score to at least 620?

(3) Is it too late to obtain a secured card? I can't afford to apply for a new credit since I don't wanna sabotage my current score of 592.

(4) My DTI is pretty good. My income is $94K, and this would be my first-time home purchase, which is around $360K.

I would appreciate all your honest, brilliant, expert advice on my situation. Thank you so much for listening.

[ShanetheMortgageMan]

Are the charge-offs reporting late payments each month?

More positive revolving credit should improve your scores and authorizer user accounts can help accomplish that.  Make sure it's an account with a longer history and minimal to no balance.  I'd refrain from opening any new accounts at this time since your timeframe to buy is nearing.

The good news is even if your loan had to be manually underwritten for an FHA loan it sounds like your credit history has been clean for long enough (~3 years from the way I read it).  FHA just requires 3.5% down once you have a 580+ score and rates typically get better once you hit a 600 or 620 score.

What's the need to buy by July of this year?

[jules79]

Hey @ShanetheMortgageMan, thanks so much for your reply:

" Are the charge-offs reporting late payments each month? " = No, they are not, 5 are showing as "C/O" and 3 shows as "Not Reported"

I will go ahead and have a family member add me as an A/U with the longest history and minimal to no balance, as you stated. Cheers!!

" What's the need to buy by July of this year? " = Lease is expiring, that is why the sudden move.

[FlaDude]

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@jules79 wrote:

I will go ahead and have a family member add me as an A/U with the longest history and minimal to no balance, as you stated. Cheers!!

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Amex doesn't backdate history for AUs so best to use cards other than theirs.