Questions about Bad Credit Answered

We are mortgage lenders, and we talk to North Carolina “wanna’ be home buyers” all the time who hit some rough times with the Economy going down hill.  Things that they couldn’t have predicted, or avoided are now huge weights around their neck.

Most of the time, these are good folks, who have gotten beyond whatever happened, and are now ready to buy a house.  We try to answer all of the questions from folks who had some bad credit, and now want to meet the minimum credit score requirements to buy a house in NC.

Right now, the minimum credit score to buy a home with no money down (with the USDA Home Loan Program Credit Scores) is at 660.  The BEST terms, easiest qualifying for USDA Home Loans, FHA Home Loans and VA Loans requires two credit scores over 640.  We can do mortgage loans to those who qualify with scores between 619 and 580.

Because of the “tiered” minimum credit score requirements for a mortgage, we try to answer all questions with the most current mortgage credit score information available. We also answer questions on several forums and I thought you might want to see questions others are asking about bad credit / how to improve your credit score:

• QUESTION: Can you pay the original creditor (like Verizon) instead of a collection agency (like CBE) that is reporting information on your credit report? What if you decide to pay your debt to the people who originally billed you –  since they still send you bills and statements, instead of the collection agency? Will the collection agency see that you are making the payments and leave you alone?”
• ANSWER:  First off, in North Carolina, if the debt has been sold, you should not still be getting a bill from the original creditor.  In the case of a medical bill, you need to check and see if you are being contacted regarding two separate items!  If you determine that there’s only one bill – and two different groups are trying to collect, then YES, I would deal directly with the original creditor. Before you do ANYTHING to pay a credit collection off, learn more about the difference between a charge-off and a collection account.

• QUESTION:  I need help finding my credit score?  The report I have doesn’t have credit scores on it, and I’d like to see my updated report (with scores) for all three agencies. What’s the best/cheapest site to purchase the reports?
• ANSWER:  If you want a free credit report, you go to Credit Karma. If you are not eligible for a free report, and you are working on your score so that you can buy a home in North Carolina, we can pull your credit, and send you your report.  I don’t believe any of the sites offer you the opportunity to “see” your scores because… Mortgage Credit Scores, Insurance Credit Scores, Medical Credit Scores, Retail credit scores are all “calculated” differently. There are some simple things to do that will help raise your credit scores, no matter what.

• QUESTION:  How can I get my credit card company to raise my limit?  I have a secured credit card and my limit is $200.  My current balance is around $100.  My available credit is $82, and I am supposed to pay $15 a month.  Sometimes I pay $20.  I need to know how much I need to pay to get my credit limit increased.
• ANSWER:  If you have a SECURED Credit Card, then you made a deposit to get the account open… which means you would need to make another deposit to get the limit increased.   If you are asking, how long do I have to wait for them to extend credit, without me having to SECURE it – well that’s a whole ‘nuther question.  You need to check your credit, and establish more than one trade line – in general, to get minimum credit scores for a mortgage, you will need 3 open lines of credit, or credit cards or student loans.  If you need more credit history, and you don’t want to get another secured card, you might be able to get family to help you by adding you to some accounts.

• QUESTION:  Will using a Consumer Credit Counseling Agency hurt my credit scores?  
• ANSWER:  If you are a Veteran, and you’ve made more than 9 payments to a NON-PROFIT Credit Counseling Agency, we’ve made that work.  If you applying for a USDA Home Loan, you will need to be out of that plan, and if you are applying for a FHA Home Loan, you might be treated the same way as someone in bankruptcy.

If you are serious about fixing your credit, and improving your FICO score – schedule time to talk to Steve Thorne,  919-649-5058.  Straight Answers that will really help you in your goal of a better credit score!  We want to help you buy a home in NC!

If you have more questions about ways to improve your credit scores, leave us a question, or please call 919 649 5058!  We can do loans in North Carolina for folks with credit scores below 640 We help folks all over the state of North Carolina with home loans and the best mortgage rates.  You can also get updates from us on Facebook and Google +