Will my credit scores allow me to get a mortgage at a goord rate?

My question is will I be able to get a mortgage with good rates with the scores I have now?

I am 23 and my credit scores are: 582 Trans Union, 552 Experian, and 545 Equifax.

I have a number of medical bills that went to collection while I was in colllege. I have been paying those medical bills back a little at a time (I have a payment plan with the collection agency). And have two 30 days late (almost a year ago) on my car loan, and a 60 days late on a student loan.

I recently applied for a new secured credit card (which I hope to receive any day) and have been listed as an authorized user on my cousin's credit card. My cousin has had her credit card for 2 yeas and has never been late.

I am currently working with a law firm that has actually gotten 6 items deleted from the three reports. So, my scores are a little better than they were.

I just feel that it is not right to be punished for getting sick (I had cancer) and not having insurance.

Update:

My current scores are 559 TransUnion, 618 Experian, and 557 Equifax.

The reason the Experian score is so much higher is that a new revolving account (my cousin's credit card) has reflected on that report. I am expecting the credit card to reflect on the other reports soon.

If the other scores jump anything like the Experian score, I expect the others to be around 610.

10 Answers

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  • 1 decade ago
    Best Answer

    Unfortunately, due to the recent mortgage crisis, anyone with less than a 660 is going to have a hard time getting a mortgage of any kind. There are plenty of people in your shoes though, who have had a crisis to two. My advice is to talk to a mortgage broker who may be able to work with a company that will accept your reasons for having a low credit score. Illness is the number 1 cause of bankruptcies in this country, so you are not alone in your problem.

  • Anonymous
    1 decade ago

    Most mortgage companies go by the median scores as each credit agency reports a high, medium and low score. You would need scores in the 700's in order to get good mortgage rates, my median is 720.

    Because you are so young, the scores you have will not help you with a mortgage loan that will work into your budget or favor as you really do not have enough established credit at 23 years of age.

    Mortgage companies do not necessarily count medical bills against your credit however with your car loan being late as well as your student loan can be counted against you.

    I suggest you contact various mortgage companies, tell them what you are looking for (i.e. you can't buy a $250,000 home and expect a $400 month payment so be realistic) and see what they can pre-approve you for. Pre-approval does not mean you are approved for the loan but tells you with your income to debt ratio and scores how much you can buy and at what cost per month. Once you found what you want and can afford......then you would go through the process of getting the loan approved.

    Beware of ARM (Adjusted rate mortgages) as these are mortgages that companies approve for people with lower credit ratings and can hang you. An ARM means that every 6 months the mortgage goes up $100+.

    Really work on keeping your payments on time so you can get your scores raised.

  • 1 decade ago

    Creditors do not care why your score is so low. The national average is 675 and as you know you are well under that. You most likely can get a mortgage but with all of the trouble that has hit the sub-prime mortgage companies the last couple of months you can expect to pay a high rate and be required to make a large down payment.

    If I were you, I would wait and work on improving your scores until you are over at least 625. You will still fall into the sub-prime market but will get a lot better rate.

    Source(s): Auto Finance Manager for over 7-years.
  • 1 decade ago

    I have been trying to refinance my home and my credit score is really low. Most mortgage companies I talked to told me my credit score has to be at least 500. You should be able to get a loan as long as you can write a letter of explaination about the bad marks on your credit. Even though you are on your cousin's credit card the good marks go on their credit. It won't show up on yours because it isn't your card. I also have major medical bills on my credit and 4 years ago I was able to get a home loan even though I had filed bankrupcy 2 years earlier. You just need to find the right lender. Ameriquest is a good one and they will do financing as long as your credit score is over 500. Good luck.

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  • 1 decade ago

    Unfortuantely, I don't think you'll have much luck, I copied the following out another post:

    FICO SCORES

    720+ = EXCELLENT!

    680-719 = good

    640-679= Acceptable but higher rates will apply

    600-639 = Lowest score you will probably be able to get a mortgage with HIGH INTEREST!

    under 599 good Luck

    Not sure, I would've worded it that way, but it gives you an idea of where you need to be.

    Just keeping working on paying things off, keep your c/c debt low, and removing items that can be removed. It's a long process and takes time, but you'll get there.

  • 1 decade ago

    When my brother got his business management degree he was taught that medical bills are not counted against your credit score. I would double check that your medical bills are being used against you and find out why (check with your legal firm). Other than that, you are on the right track and I think time is what it will take.

  • 1 decade ago

    sorry, your fico is horrible and a mortgage should be the furhtest from yor mind. work on getting your score up over the next few years, then look for a mortgage. you need to get to the 700 range

  • 1 decade ago

    no they don't really care what the reason for the low scores is just those scores i say wait and work on your credit rating a little while longer if you want a good rate

  • 1 decade ago

    refinance home loans generally worsen the terms of your mortgage, you are further risking your property if you fail to meet the monthly payments. And though you may be replacing expensive debt with cheaper and more affordable debt, you are also replacing unsecured debt with debt that is secured with your home. If you are not good at managing your finances (and that's why you had to resort to debt settlement), that's something that you'd better avoid. read more about it at: http://www.credit-card-gallery.com/article/149,Cre...

  • Anonymous
    1 decade ago

    Depends on alot of factors. Shoot me an email to msmith@premierloangroup.com, and let's chat.

    Marty

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