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Asked by Jessica F, Fall River, MA Fri Aug 10, 2012

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11
, ,
Sat Aug 25, 2012
The 640 Credit Score is the minimum credit score to buy a home with most Lenders in the United States today. But a 640 credit score is a far cry from a 680 score or even a 720 score. There are substantial differences in the quality of the credit history; a 640 score is "just good enough" but doesn't necessarily define a quality credit history.

MyFICO.com defines the logic of credit scoring as being "predictive." That's why financial decision-makers for mortgage loans, credit cards, auto loans and other credit decisions rely on the credit scoring system: to predict the potential risk of a lending or credit-approval decision. A lower credit score "predicts" certain things about the Borrower's financial position in the world and the ability to repay debt.

While a 640 score may be sufficient to qualify for FHA Insured financing with many Lenders, I have some more practical advice for HomeBuyers today. I strongly recommend you review your finances, especially your credit, and take your time to prepare for the homeownership experience. Buying a home and taking on a mortgage loan is a HUGE step. If your credit scores are less than 680, you really need to get better prepared so that you don't find yourself in trouble soon after buying your home.

Folks with poor credit and insufficient financial standing who purchased homes during the BOOM got easy mortgage money, but look at what happened after the fact. The mortgage is your responsibility; prepare yourself with strong credit, sufficient savings, and consistent, reliable income before you consider buying a home.

Sure, there are zillions of mortgage people who'll volunteer to help you with financing now if your credit scores are lower than 680. Based on real world experience of 22+ years in this industry, I'd suggest those mortgage people aren't offering valuable assistance, only leading you to a potential financial disaster.

Think for a moment of some of the bravest people who live and work in our towns and cities in the United States: Firefighters. I have seen firefighters jump off a still-rolling fire truck and rush into a burning building. The incredible risk these brave people take is tempered by one important element: Training. When they're not putting their lives on the line for their communities, firefighters are training like Olympic Athletes. They train constantly for a simple reason: they need to prepare to run into burning buildings and to deal with the unkwown factors of a fire.

So, I ask you this: If the Bravest people in our communities, who put their lives on the line every day, wouldn't DARE think of running into a burning building without the proper training, why would someone who isn't prepared take on the daunting task of homeownership?


Trevor Curran
NMLS #40140
0 votes
Manny Lindo, Agent, Fall River, MA
Sat Aug 25, 2012
Sorry Jess,

Ops..Typo...My Cell Number is actually 508-207-3777. Give me a call to discuss repairing your credit.
0 votes
, ,
Sat Aug 25, 2012
Good afternoon Jessica,

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://www.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.

Trevor Curran
NMLS #40140
0 votes
Jeff Riley, Home Owner, Dartmouth, MA
Mon Aug 13, 2012
Hello,

I can help your husband for free and once we get his score where it needs to be, I can do the financing. We are a Direct Lender and are the #1 purchase lender in Bristol County !

Jeff Riley
#641421
Residential Mortgage Services, Inc. (RMS Mortgage)
77 State Rd.
Dartmouth, MA 02747
jriley@rmsmortgage.com
0 votes
Manny Lindo, Agent, Fall River, MA
Sat Aug 11, 2012
Hello Jess, I am willing to help you repair your credit for Free provided that you buy a home thru me. Give me a call to go over the details. 509-207-3777. Manny Lindo
0 votes
, ,
Sat Aug 11, 2012
Good morning Jess01430,

Take a moment to pat yourself on the back for approaching the Homeownership experience the right way: with proper preparation for the big responsibility of owning a home and paying a mortgage loan. I applaud you.

Even though your credit may not be sufficient to qualify at this time, it can't hurt for you and your husband to sit down with a Local Mortgage Banker to review your complete qualifications for mortgage financing. Your Mortgage Banker can counsel you not only on the steps you can take to improve your credit, but also on the other areas you need to prepare for: Income and Assets. Most experienced Mortgage Bankers (with at least 15 years experience) will take the time to counsel a future client. I do it all the time and consider it an investment in my business for the future, and a way of giving back to the community my experience and knowledge.

Here's some basic advice for you:

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://www.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.


Trevor Curran
NMLS #40140
0 votes
, ,
Sat Aug 11, 2012
Pay your bills on time, keep the balances on credit cards below 25% of the limit at all times and clean up/pay off all collections beginning with the ones that are the smallest and reporting the most recently. Try to avoid making payments on collections, save enough money to pay each one off entirely, any activity on a negative account will lower credit scores, even making payments. Have at least three open accounts paid as agreed, avoid closing accounts like credit cards, the longer the history the better.

Be careful of credit repair companies, most of them tell people to dispute everything negative in their credit file including the accurate stuff that is negative. That is a crime, lying about anything in order to get a loan is fraud and depending on the location and the type of lender the penalties can be up to 30 years and several million dollars. My DE underwriters will not clear a loan to close if there are open disputes on the credit report, ever try to get a dispute removed? You have to dispute the dispute and that is going to look bad all by itself. As of 8/13/12 it becomes MANDATORY that any suspicious document given to a lender must be reported on a Suspicious Activity Report (SAR). That includes something suspicious on a credit report. The fine to the lender for not reporting something is $5,000 per document, could jump as high as a Million Dollars and/or jail time if it looks intentional. Every lender is required to have a corporate officer to review every file in case the loan officer doesn’t report something. This is a Federal mandate, not your local state government. These reports must be filed with the Feds, you do not want to be on one of these reports. So build your credit report the right way, do not try to take a short cut. I hope this info protects you from harm, see more on the link below, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes
Karen Barney, Agent, Assonet, MA
Sat Aug 11, 2012
You should speak to a mortgage professional about your situation. They will give yo the best direction and advice on how to bring your scores up quickly, and in what time frame to expect change.

I have a few good ones up my sleeve! Email if you want further info.
0 votes
Louis Wolfs…, Agent, Needham, MA
Sat Aug 11, 2012
You might want to ask a mortgage broker or lender as they deal with credit problems daily and may be able to steer you in the right direction.

Some simple suggestions - pay your bills on time. Pay off any small loans you can. Get a copy of your credit report (its free once a year from the 3 major companies) to see if there are any mistakes.

Good luck
0 votes
Aaron Wluka, Agent, Easton, MA
Fri Aug 10, 2012
Call me in the morning, I can help.

Aaron Wluka, Realtor
Weichert Realtors Briarwood Real Estate
508-333-5588
aaronismyrealtor@gmail.com
http://WWW.AARONISMYREALTOR.COM
0 votes
Ron Thomas, Agent, Fresno, CA
Fri Aug 10, 2012
I am not a credit expert, but I can definitely tell you one thing NOT to do:

We have heard of a lot of companies that are charging $1500 or more to help people;
and all they're doing is helping themselves.

Good luck and may God bless
0 votes
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