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- What is generally required to get a home loan?
- What is the length of time derogatory information can stay on my credit report?
- How can I legally remove bad credit from my credit report?
- How can I legally add good credit to my credit report?
- Can I manage my debt to improve my credit scores?
- What about debt management services I see advertised on TV?
What is generally required to get a home loan?
CREDIT --To get a loan of 100% loan, your middle credit score typically needs to be above 600, although some lenders will go down to a 580 score. This is far from perfect credit. Excellent credit are credit scores over 700.
The lower the credit score, the higher the interest rate.
Even people with credit problems or bankruptcy can many times qualify for a 100% loan, if they have adequate good credit accounts. Recent credit problems hurt credit scores more than problems years ago.
INCOME--You need to have sufficient income to qualify for the home loan and your other monthly debt obligations.
Typically, those debts counted against your income are ones that show on your credit report, including: car payments, credit card monthly minimum payments, student loan payments, gym memberships, installment loan minimum payments, etc.
Child support or alimony payments paid out also count against your income, while child support or alimony received by court order for 2 more years after you buy your home typically may be counted as income.
Too much debt may prevent you from buying a home, unless you have high income or can make a down payment.
YOUR JOB--Good job stability is important.
To count your income, you need to be in the same type of work--without interruptions working--for two years or have recently graduated from college, using your degree in your new job. There are some loan programs that only require 1 year in your line of work for your income to be counted.
Changing jobs by itself, isn't a problem. Changing jobs 4 times in 2 years is. Or, changing the type of work you do. If you change the type of work you do, that starts a new 24 month clock before your income can be counted.
NOTE--If you have EXCELLENT credit and can make a down payment, there are loan programs where income, monthly debt obligations and job history aren't an issue.
What is the length of time derogatory information can stay on your credit report?
Bankruptcy information can stay on a credit report for ten years. Information about foreclosures is reportable for twelve years from the date filed.
Garnishments, judgments, and tax liens can stay on the report for twelve years from the date of entry or for seven years from the date they were satisfied. Dismissed garnishments, judgments, and tax liens are not reportable.
| Type of Information |
Length of Time Can Stay on Credit Report |
| General credit information |
Seven years |
| Collection |
Seven years from date of last activity |
| Bankruptcy |
Ten years |
| Foreclosure |
Twelve years from the date filed |
| Garnishment |
Twelve years from the date or entry or seven years from the date satisfied |
| Judgment |
Twelve years from the date or entry or seven years from the date satisfied |
| Tax lien |
Twelve years from the date or entry or seven years from the date satisfied |
| Dismissed garnishments, judgments, and tax liens |
Not reportable |
A consumer can request copies of their& credit report from the three credit bureaus and dispute information that is incorrect or undocumentable.
Incorrect or undocumentable information can be corrected or removed. Only the credit grantor or credit bureau can remove information – the consumer cannot remove it.
How can I legally remove bad credit from my credit report?
How can I legally add good credit to my credit report?
These details are provided in our members-only area.
Our membership fee is currently being waived for a marketing test, so be sure to check out our "Members Benefits" section on our home page!
VERY Important: Keep in mind that paying charged-off debts or collections does NOT improve credit scores. A paid collection or a paid charge-off is no better for credit scores than an unpaid collection or charge-off.
Working on your credit does not necessarily require you to pay off past collections. But if any collections are paid off, they must be paid off in the correct, precise way to actually improve your credit scores.
Can I manage my debt to improve my credit scores?
These details are provided in our members-only area.
Our membership fee is currently being waived for a marketing test, so be sure to check out our "Members Benefits" section on our home page!
What about debt management services I see advertised on TV?
Lenders view use of these debt management services like a bankruptcy. Those who enroll in these services are seldom told this.
And many of these services result in "rolling late payments", where each time a payment is made by these services to your creditors, it is over 30 days late. This destroys credit scores!
However, there are others of these services that are reputable, accurately explain their service to those who enroll, and who really do help people get out of debt and prevent bankruptcy. Reputable services still do some injury to credit, but they do less and it is more short-term.
SmartHomeBuyersDFW.Com Loan Officers can suggest reputable debt services we work with for clients who really need this type of service.
Some lenders (including FHA and VA) look more favorably on enrollees in these services than most lenders, when they have made 12 on-time consecutive payments.
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