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We own our house and it is paid off in full. Our credit score is poor. One bureau has our score about 603 and the lower one is 555 or so. Our average score is about 580. Since our house is paid off would we still be able to get a loan for around $25000 give or take? Its valued at or around $130000. We have no other outstanding debt at this time except about $2000 in medical bills which we are making payments on. We have no credit cards and no auto payments. We got into this credit rating mess due to a injury. My wife and I both work and gross around $7000 a month. We are wanting to get a loan to help with our son who has a disability so we can get him some extra help. We are going to have to stay out of state for a few weeks while he is evaluated. So, I guess my main question is....Even with bad credit scores but having our house paid off, would a lender still borrow us the money?
I know we need to get a secured credit card just so we can start rebuilding our credit but our son is our number one priority right now. We just found out about this clinic for our son so we are in need of the loan soon. This loan will help us get back on our feet and start rebuilding our credit.
Thank you all in advance! Very Happy

Niicss · Posted: Tue Sep 15, 2009 2:49 am Post subject:

As your credit score is below 620, you won't be able to get a loan though your home is presently free and clear. You will have to raise your score up to 620 in order to get a FHA loan. If you want a conventional loan, you would require a credit score of 720-740. You can check out the given page in order to know some steps to rebuild your credit score:
http://www.mortgagefit.com/credit-rating/credit-repair.html

JKennedySLG · Posted: Tue Sep 15, 2009 9:05 am Post subject:

Brian, please list where the property is located. Although 95% of Lenders will require a 620 Credit Score, there are a select few lenders who will go down to the 580 mark. As I have stated in other posts, this is case-by-case and based strictly on the underwriters discretion. I hope this helps...

Posted: Tue Sep 15, 2009 12:38 pm Post subject:

I am located in Illinois. I did talk to Ditech the other day and they said they go by the middle of the three credit bureau scores and their minimum score required is 580. It just seems like a lender would be willing to give a loan since our house is paid off. If for some reason we defaulted on our payment it would be their gain. Our credit took a turn for the worse due to a injury I had and could not work. We got behind on medical bills and credit cards. That was over 3 years ago and we got everything paid off once I was back to work. We should have made a attempt to improve our credit over the past year but at the time we didn't need a loan. We just weren't thinking and I regret not doing something about our credit sooner. Live and learn I guess. We now understand how important our credit score is and are in the process of getting things straightened out.

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