We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.
It is unlikely you could be approved for mortgage financing with that credit score at this time.
Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.
First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.
Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website. http://consumer-action.org/
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.
"Ok, so my is no closing of any accounts, just moving funds into the better interest rates."
Yes, do not close any accounts. Longevity of credit is one of the variables in the scoring model. Rather than "moving funds" you are "moving debt" from one card to another. By doing so, you "balance out" the use of your credit. The scoring model would rather see a 50/50 split between two cards as opposed to having a single card being maxed-out. Credit scores seek to grade one's ability to manage debt.
"I will want to pull my own tri-score now, to have my Bank lending official give me some consulting on what I can finance. When the time gets serious for my home purchase (it's the home I'm living in now, and I want no other!) then I will have my mortgage broker pull my "tri-merge" credit report for the real thing."
Personally, I would advise that you seek out a Mortgage Broker (not a Retail Bank) and have them pull a tri-merge credit report now so you have time to work on any issues that are identified. As just one example, it is quite common to have items show up on one's credit report due to â€œalias name" issues (names similar to yours but are not you).
I also agree with Robin regarding her last post (re: one credit account), this could be an issue for you if not addressed!