In September 2011 I met with a young lady that wanted to begin the process of getting ready to purchase a home. I ran the credit and it was obvious that credit wise, she was nowhere near ready. There were 3 collection accounts and no credit that was positive at all. I coached her on working out a settlement for the collection items and on arranging 3 secure credit cards. I explained that once the cards were set up, to charge something each month and pay off the balance each month.
She called me again we set up an appointment to meet. Her statement was that I am ready to buy. OK, let’s take a new look. Two years ago when I ran the credit, she was a 554 mid-score and when I ran it this time the mid-score was a 516 .
She had 7 credit cards and all of which were maxed out and 3 collection accounts. Unfortunately some folks just don’t get it. I again when over the credit report and told her exactly what had to be done. She said she would get the collections paid and all the credit cards paid off by the end of the year.
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She wanted to know, once she corrected everything, how long would it take to get her scores to where they need to be able to qualify for a mortgage. I told her a year or more, explaining scores drop much quicker than they go up. Do I trust she will follow through, not based on her track record, but I am always hopeful, especially when someone is paying $1500 per month for rent.
