Do me a favor and ignore your credit score for a second. One thing that you need to realize regarding your credit is that what is done is done. Your only option for past credit delinquencies and collections is to either pay them off or leave them alone. While your score can be a determining factor on a conventional loan, it is less of a facotr for an FHA loan. If your credit is bad because of past factors such as job loss, medical issues, natural disaster, etc and you can write a letter of explanation and provide some supporting documentation to that fact. Along with that you can show not only recent timely credit that is on your credit report and you can provide alternative credit such as 12 months worth of timely payments for such items as Auto Insurance, Utilities, Cell Phone Bills, Rent Checks, etc. I even had someone use their last 12 months of payments for their child's braces.
If you can support your credit worthiness and your ability to repay, then a lender is more likely to approve your loan vs. other applicants. It's all in the way you present it.
Yes, you want derogatory items removed from your credit report so your scores will improve, but you don't have to be under the impression that that HAS to happen before you can own a home.
Please call me if you have any questions.