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HomeBlog Blog“We’re trying to buy a home, but my credit score is 579”
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“We’re trying to buy a home, but my credit score is 579”

January 31, 2013 by National Debt Relief

House and calculator and credit scoreIf your credit score was 579 could you get a mortgage? That would depend a lot on why you had such a low score. Let’s suppose you had several old accounts from back in 2007 or 2008. Would paying them off help raise your credit score?

Paying off old debts won’t help

Unfortunately, if you have old debts you had defaulted on then settling them wouldn’t help your credit score. As the old saying goes, that ship has sailed. The information is in your credit report and won’t go away. Debts you didn’t pay off in 2007 will appear on your credit report until at least 2014 and maybe not until 2017.

To get a mortgage

If you want to get a mortgage, the first thing you could (and should) do is contact those creditors where you had defaulted and try to settle with them. In fact, most mortgage companies will insist you do this before they will approve your mortgage. When you contact those lenders, you might offer to settle your debts for less than 50% in a lump sum. If they do agree, make sure you get this in writing.

To improve your score

One good way to improve your credit score is to get a secured card. This is where you deposit money to “secure “ it. You could get a secured card by depositing $300 or $500 and then use it anywhere merchants accept Visa or Mastercard. You would have a limit as to how much you could charge, which would probably be whatever amount you deposited to secure the card. In other words, if you deposited $500, you could probably charge up to $500. However, with some secured cards, you could be limited to 90% of your deposit. So with a $500 deposit you might have a credit limit of $450.

Why a secured card would help your credit score

The reason why it’s a good idea to get a secured card is because the bank that issued it will report your usage to the three credit reporting bureaus. If you pay off your balance on time and use the card prudently, this will be reported to the three bureaus and will have a positive impact on your credit score – but only after time. Having and using a secured card for a few months won’t have much of an impact on your score. But if you use it carefully for a year, you will see your credit score improve and will probably be offered an unsecured card. This will expand your credit history as you will be able to use both cards but, again, must promptly pay off your balances each month.

About that mortgage

If there is some reason why you would need to get a mortgage in the next two to three months, you may be out of luck. If you shop around long enough, you may be able to find one but it will come with a higher-than-normal interest rate.

What you need to shoot for

As a general rule, you would need a FICO score in the 640 range to get a mortgage with a decent interest rate. If you did pay off those old debts, got a secured card and used it sensibly, it would take probably 12 months for your score to get into the 640 range and two years for it to get to a good score (660 to 749).

Do you qualify for debt consolidation?

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National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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"When I first decided to go with National Debt Relief and I..."

Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/17/2021 Charlotte: Our call may be recorded. What actually made you decide to work with our National Debt Relief as opposed to other providers? GLYNN: Well, when I first decided to go with them and I talked with the representative, I got a favorable impression of him. And since we've gone with him, we've had very good experience with them. Charlotte: Can you tell me about the program that our National Debt Relief signed you up for? GLYNN: It's a debt consolidation program. Took our credit cards and then working to pay them off. So far, they paid one of my wife's off and one from me. Took the harassing phone calls that we were getting and got them to stop and got creditors to wait on their payments so we could get money to pay them. Charlotte: What did you think about the enrollment process you went through? GLYNN: Enrollment process? Well, it was, I guess... Charlotte: Like how easy or difficult did you find the enrollment process to be? GLYNN: It was no [unclear 0:02:52], just what we could do, and looking at our financial situation, what we was able to do. It's just that, mainly, I was the point where I was fixing to go bankrupt and I didn't want to do that. And this was a way to, I guess, not to go bankrupt. But it still left that option open. Charlotte: In what ways would you say that this program has worked for you? GLYNN: Well, I guess the biggest thing is it stopped the harassing phone calls that we have been getting sometimes five or six times from the same creditor a day. It gave us an opportunity of being able to, I guess, set up a fund that we can use to eventually pay off our credit cards and our debts. Charlotte: About how far would you say that you were in at this point? GLYNN: At the time we signed up? Charlotte: At this point right now. About how far are you in the program? GLYNN: Well, it's, [0:05:00] I guess, about -- I would say I think I was like nine months. And like I say, they were able to pay off one of my wife's credit cards and are working on another one and was able to pay off one of my credit cards, and hopefully be able to pay off another one. Charlotte: Walk me through the interaction with your National Debt Relief negotiator. Give me a little insight on what that experience was like with that representative. GLYNN: Well, he helped us go through and get signed up on a program. He helped us with the getting, I guess, a financial report to establish a savings account to be able to use to start paying our debts off. We didn't know what to do or how to go about doing it. Charlotte: Is there anything about your National Debt Relief negotiator that really stood out and impressed you at all? GLYNN: Yeah, his manner and I guess he was polite and he didn't put down on us. And he led us and showed us the direction we need to go. Charlotte: Is there anything about this process that you would have liked to have seen handled differently? GLYNN: No, not really. Charlotte: If you had to rate this experience on a scale of one to five, and five is that you would recommend to friends and one is you were pretty dissatisfied, how would you rate it? GLYNN: I would rate it at a 5. Charlotte: Would it be okay if I posted your comments as a review on our public website for National Debt Relief? They just like to know what their customers felt about... GLYNN: If you think they're good enough to post. [chuckles] Charlotte: I will send over a link so that you can have it as a record for yourself also at glynncoates@gmail.com. How would you say that your life has been impacted by working with National Debt Relief? GLYNN: Well, it's taken off a lot of the burden off that we were under. We was to the point of, "Just go ahead," and getting a lawyer to file bankruptcy. But this has given us an opportunity to pay some of our debtors back. We made the debts under good face and circumstances beyond our control, it got out of hand. And so, we were trying to -- we wanted to pay them back, [0:10:00] or as much as we can so that, I guess, more ease in our minds. Charlotte: If a friend or a family member were asking you about National Debt Relief, what would you tell them? GLYNN: I'd tell them if they was needing, that they were good to work with and they continued to try to help and work with us. Charlotte: Our call is recorded.

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Glynn Coates
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