How to increase my credit scores in 6months to buy a home?

Question

My credit score is 545 I have a couple of collections, medical bills and a couple of other things which our mines that I have to pay. My brokers says I need my scores to be at 610 before he can help me get a mortgage. My lease is up 1/31/09 which I know I will have to go month to month. He informed me to talk with a credit counselor which is gonna cost me. Now I know I have to pay whats on my credit, other than that does anyone have any suggest that I can do to raise my scores within 6 months. I have collections on my account which shows paid, can I get that taken off my credit report even tho it says paid with a zero balance?

Answer 1

The the collection accounts will drop off of your account after 7-8 years.  The only way to get them off early is to dispute them yourself or pay some to dispute them for you. If you need a recommendation, let me know.

If you only have 6 months, i'd pay off the collections accounts now.  Your score will actually drop initially but should rebound.  

Also, paying down your credit card balances below 50% of the limit will improve your score more than just a few points.  If you have several cards with high balances this might be the only thing you need to do to get your score up to your goal.  Actually, your goal should be 620, not 610.  Depending on how much home you are looking to buy, an FHA loan would be the loan to target.  FHA does not have any penalties for a 620 score.  Conventional loans will cost you over 2% points (2% of the loan amount) in fees with a credit score at 620.  

One other trick, if you do have high balances on your cards and cannot afford to pay them down, try getting a (installment) loan to pay them off.  Installment accounts do not take into consideration the balance.  There are several peer to peer lending website now that are very reputable.  Try Prosper.com:

http://www.prosper.com/referrals/all.asp...

I wrote an article on peer to peer lending if you want to check it out:

http://www.mortgagemagnifier.com/tools/a...

Answer 2

pay off the collection items (keep receipts)

if you have any credit cards - pay them off to at least half the high balance (that will give you a small bump in score)

then have your loan person do a rapid re score and see where you're at and re evaluate  whole process will take about 2-3 months if you pay off the collections, medical etc quickly