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Can I buy a house with a 583 credit score?

I claimed bankruptcy that has been charged off 3 years ago. Can I get a first time home loan with a Beacon score of 583?

s.mckaybiz's picture
s.mckaybiz | Joined: April 24, 2008 08:05 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome to the forums skins09,

In all honesty you wouldn't be able to qualify for a conventional mortgage of any kind with a score like that and I would be afraid of the rate you would get if you could find a way to get approved with someone right now.

I know you probably really want to buy a house right now but you are so close to the 620 score that you'll need to qualify for a normal 30 yr. fixed rate mortgage with a good interest rate. I think if you could it would be best to wait just a little longer and try to raise your credit score a bit more first. You could literally be saving yourself 10's of thousands of dollars in the long run if you do.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

precisely, scott...skins you have to build back your score to 620 and then jump into the market. it's not that hard to do in a reasonable amount of time.

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Garysnober's picture
Garysnober | Joined: March 17, 2009 12:22 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

If you have time to do this, And you follow the correct steps you can accomplish this in a very short and timely manner. 40 points is not much to gain over a few months time. You will have to go for an FHA loan for the 620 score. Is the BK why your score is soo low or are there other factors effecting your score?

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gunz.ijjistaff's picture
gunz.ijjistaff | Joined: April 7, 2009 02:40 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

[quote:e96e5a1fe0] Can I get a first time home loan with a Beacon score of 583?[/quote:e96e5a1fe0]

Hi,

You cannot get home loan @ 583 Credit Score, You may make it 620 Here is you want to make 37 More points to get home loan.

Thanks. :roll:

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lynnbrown's picture
lynnbrown | Joined: March 24, 2009 10:07 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have been in the mortgage lending industry for over 20 years. Not so long ago 580 was an acceptable score - Keep working on getting that score to 620 or higher. Higher credit score will give you the better interest rate which equates to being able to buy more home. And I think even in a year you will still be in a good position to buy a home at a very reasonable amount.

Are you also working on a down payment? 5% or more also will help to qualify you for a home loan and keep those payments down.

Best luck to you!

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I hear everyone say get your scores up, elevate to at lease 620. Unable to qualify for much of anything at this point credit wise, have stability on the job ect.. so what are the suggestions to help improve credit at this point?

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

jess, much of what you need to do depends on what is on your report at the moment. you can boost a score by doing a wide variety of things: pay down balances on credit cards to a minimal amount or zero, but don't cancel them; stop shopping for credit so no companies will be checking it; if you're late on any debts, pay those late payments asap; if you have collections accounts, contact them and negotiate a payoff and then be sure to pay them off.

it's impossible to be more precise without knowing what you are actually facing, but there's some good starting points.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hello Jess, The first thing to do when wanting to improve your credit score is to obtain your credit report. It is important to review what is currently listed on your report so that you can see if there are any discrepancies or incorrect information.

Call those creditors (credit reports generally will have contact information for creditors) to obtain a dispute form or what their procedures are to dispute an item on the credit report. If there is information being reported on you that is incorrect, then contact that credit bureau.

If there are any 'open' collection accounts, get those paid right away and obtain a paid receipt.

Then it is a good idea to talk with your local bank to obtain a small personal loan to re-establish or build your credit. Obtain the loan, make payments for a couple of months and then pay the balance down by at least 2/3 (more than half).

These are just some suggestions and ideas - and this process can take many months. Which you would want to wait at least 6 months before pulling another credit report.

Some people are approached by so called 'credit repair' companies - beware of those companies, as I know of too many people that pay a lot of money only to find their scores lower.

Consumers need to rein in on using credit. Having one or two credit cards with a low balance is good, but try to pay cash when you can and when you use the credit cards, be sure to get the balances paid down to 1/3 of your available credit line.

Hope this provides some help.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

all good suggestions provided by our guest here...i particularly like that guest has mentioned to beware of "credit repair" companies. many of the credit repair schemes advertised are purely scams, and are to be avoided.
how to tell if they're legitimate? i'd say just avoid all of them and that won't be a concern.

thanks, guest.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi there,

This is an interesting blog.

In October 09 I had a credit score of 537 and managed to get it up to 583 in just 4 months. The only thing I did was using my credit card (with low credit line)for almost all my purchases and paying it off within 30 days. I never used more than 50-75% of the available credit. I applied for 1 store card in the past 4 months and got declined. I am trying to lift my credit score to the next level.. what do you recommend me to do within the next 6 months?

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

if the only current account you have is that credit card, that's part of the difficulty you'll run into in trying to increase your score. what you really need is more favorable tradelines. a secured credit card can help you, if yoiu have the money to spare to tie up as pledged funds. and, of course, if you can find another creditor to help you build a better report, that'll help.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am trying to re-establish my credit. a year ago i went thru a credit repair and they wiped all bad from my credit report. but i am having a hard time boosting my credit scores. im not sure how much it has boost since the repair, but im trying to get to a 620 for a USDA loan. i bought a car 4 months ago with a car loan and i have a small loan with a finance company for a bout a year. thats about it. but its been a year since i have started paying on time and doing right, but getting to a 620 is really taking a long while. Any answers why? or any suggestions on how to boost up my credit score fast so i can qualify for a home loan?

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

There is no specific reason for this. It will take some time to improve your credit scores. You should keep on paying your debts on time so that your credit scores get a further boost and start improving faster.

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david.baker's picture
david.baker | Joined: April 21, 2011 02:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Okay. First step is to obtain your credit report. You DO NOT want to contact the creditors if you plan on disputing the negative items. That will enable them to update the date of last activity. The reason you do not want this updated is because of the statute of limitations on consumer debt.

BKs will effect your score drastically. Here's the thing. No court, county, or government entity reports to the bureaus. It costs them money to report therefore they don't do it. They hire a third party company to go in and search the public records and update reports from there. They're not allowed to do this. Therefore that public records section on your credit report where the BK is showing, not supposed to be there until the courts and the government start reporting themselves.

You have the right to remove inaccurate and unverifiable information from your credit report. It is the bureaus responsibility to investigate and do this. The reason why most credit repair companies have a bad name is simple. They're lazy and greedy.

They take either a large lump sum payment or charge you an introductory fee and then a monthly fee. They will only dispute so many accounts at a time and will end up taking 12-18 months to see any real results. They typically only send out one dispute letter and hope for the best. On top of that they send it on your behalf. The credit bureaus don't have to recognize this or reply to it. In fact they're protected from it because that can be considered frivolous. So more than likely why your friends haven't seen any results.

We take a strong stand in changing the way the industry is regulated. Keep your eye out for NARCRA, so these practices won't happen in the future.

The effective way to do this is a little more complicated. It takes about 90-105 days for a full dispute. This involves all the bureaus and the creditors. It involves being educated enough to be able to supply proof of the laws each one is breaking and the associated fines imposed per infraction. You have to do things in a specific way for items to get removed. At the end of that period of time if they decide to try and ignore you, you have everything necessary to sue.

You need to keep your credit cards under 40% of the limit. How you utilize and pay your bills effects about 85% of your credit score. As far as re-establishing credit you can use authorized user accounts to pretty much instantly add credit history, or you can use secured credit cards or lines of credit.

For those of you who doubt me or want to insult me by grouping me with those other companies, I invite you to call me and learn about my programs. I assure you, you'll be singing a different tune.

Can you dispute items on your credit report by yourself? Absolutely. Can you represent yourself in a court of law? Definitely. Is either one recommended to be considered effective without a professional? Rarely.

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david.baker's picture
david.baker | Joined: April 21, 2011 02:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

"http://highlifecredit.com/2011/01/%E2%80%9Ccredit-repair%E2%80%9D-is-it-...

That's a good article on NARCRA. Just for your reference.

[size=9:ef3ee3f2ca][color=Red:ef3ee3f2ca][External link deactivated as per forum rules. Thanks.][/color:ef3ee3f2ca][/size:ef3ee3f2ca]

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

David I will take slight issue with your last paragraph. Your citation that disputing items seems linked to the self-representation in court. While I will absolutely agree that representing oneself in a court is likely to be hightly ineffective, disputing accounts doesn't require the hand of a third party. Disputes can readily be handled, if a person follows the instructions, and be successful in that situation.

[b:fa34647c42]TO LIZ:[/b:fa34647c42] You will be well-advised to go to annualcreditreport.com and obtain a FREE copy of your report - from all three repositories. If you wish to obtain your scores there, it will cost you - that's a decision you'd have to make. The dispute process is well-explained on that site, which is where you can obtain your free reports once every year.

It's unfortunate that you don't have a credit card to use for restoring your credit, but don't take that as a suggestion to go get one. If you have additional funds with which to pay down either of your two loans, that'd be slightly helpful to you in boosting your score.

I won't tell you that you ought to get everything in life for free, and that's your decision if you wish to obtain the services of a third party. It is, of course, cheaper to do it yourself, if you're able.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

George, I like you. You seem to be fairly educated on this subject which makes it a lot easier for me. The reason we compare it to representing yourself in a court of law is simply expertise and method. While it is true you can dispute items yourself with likely some success, you will most likely find yourself lost in the consumer laws that protect you and regulate how things report on your credit. We have it down to a science after years of trial and research and inside information.

If your plan is to dispute, even by yourself, I strongly advise against obtaining any of the consumer reports generated by the credit bureaus. Whether they're free or not. Reason being is they do not include pertinent information i.e. full account numbers, date of last activity, etc. that you need to effectively dispute. I would obtain either a full tri-merge mortgage or auto report. You can usually go to your local bank and have them pull this report for you for a fee.

George, if you don't mind I'd like to give you a call so that way you and I are on the same page and I can address any of your concerns with information I give out. It will probably help you out as well with some things you are probably not aware of. Let me know.

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david.baker's picture
david.baker | Joined: April 21, 2011 02:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

My log in timed out. That was me just above here if you hadn't already figured that out.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

It was pretty evident that it was you, David. I don't mind a call.

I won't argue the point that getting a triple-merge from a reputable financial institution might work well in the dispute process, though I always recommend - especially for those who can use their hard-earned money in correcting credit issues - that paying for reports is not an effective usage of their funds. If there's a lender who'll run a report gratis - perhaps with the hope that there'll be business coming their way eventually - that's a lender I'd recommend doing business with.

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amyk's picture
amyk | Joined: December 10, 2012 04:18 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am so sorry to tell you this, but I am afraid that you might find it hard to buy a house with a low credit score of 583. Yes, there are lenders that specialize in helping people with bad credit but you have to expect that because of your score, you will be charged a high interest rate that might even stress you out in terms of finances. I would suggest that you build your score up to at least 620 first before you apply so that you will be given a reasonable interest rate. However, if you insist, you can visit "badcredithistories.com/have-poor-credit-but-want-to-apply-for-a-loan/" for tips on how to apply for one.

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