As some may have read a few months ago in the AG forum, I sold my bike because my wife and I are trying to buy a house and we needed the money to get some things cleared off our credit. Well, it was a long road, but we've paid off almost $10k in debt/collections/charge-offs in the past year and a half; charge-offs and collection accounts being the being the most recent. They are/were drastically bringing down our fico scores. How did we get ourselves into this mess? two things. One, we were living beyond our means, and two, I lost my job summer of 08 and was off work for almost a year. I went back to work in 09, almost 2 years ago to the day.

At our lowest, our credit went from the mid 7's down to the 4's. No bueno! We are back up into the high 5(590's) - low 6's (610+/-) now and have been hovering here for the past 6 months or so, gaining a few points, then losing a few. We still have 3 credit cards active but are down to 30% of the limit on them and holding. 5 accounts that were either charged off unpaid or in collections were paid this last weekend. All totoled about $4k. The only debt we have now is a vehicle payment which has always been paid before the due date, a personal loan which, once again always paid before the due date, and the 3 credit cards that are at or below 30% of their limit. So my question is, how long will it take for our scores to get back into the 7's?

We are trying to pre-qualify through the VA which will lead to a pre-approval on a mortgage, but there are fico requirements to meet first. They are bound to come up, but how long it wil take is my concern. We hope to get a house by the end of this year. The sooner, the better. I'm not concerned about home prices going up, but more worried about the interest rates skyrocketing.

And for those of you drowning in debt, dont give up. Keep plugging away and you will get there!

It's pretty easy to trash your credit score and it takes significantly longer to build it back up. I researched and dealt with this stuff when my wife and I were still dating. She went from ~550 to ~750 in two years after I sat her down and explained credit, interest, and investments to her.

It may take years to get in the mid-high 7's depending on you handled the collections. If you didn't do a "pay for delete" with the collection agencies you just screwed yourself out of an instant leap. You're now stuck with the collection showing on your report for 7 years which will hold your score down for as long as it shows in the history despite being paid off.

IIRC you need at least a 620 for a VA loan. You will probably be paying a 1/4 to 1/2 point extra as a low score penalty.

I hear ya! I think most of us are drowning in debt! But do you really need credit? I've never had a credit card.... or built up credit. Just save up some cash, and flash it to the lender. In my experience, they'll jump over the table to get some!!!!

How'd it end up working out anyway? I noticed it's been a few months.



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