Loans Answers

Impact of bad credit on obtaining loans

Question: I’m hoping some of may be able to share some of your knowledge and experiences pertaining to bad credit and obtaining home loans. First, a bit of background:

In 1995, before we were married, my wife enrolled in a debt management program at Consumer Credit Counseling Services (CCCS) in San Francisco to consolidate her overwhelming debt payments at the time (she was still in college and had racked up $15k in plastic debt over the years). She was on track to pay off all balances over a course of 5 years, but due to an inheritance she was able to pay off the entire balance by the end of 1997. As fortuitous as that was, CCCS was apparently remiss in making adequate final payments to all her creditors, and as a result, even though all balances are now zeroed out, there are several 30-day- and 60-day-late marks on her credit report, the last one occuring November 1997.

I have recently written a letter to CCCS apprising them of the situation, and am even considering legal action, but after some investigation into the legalese of the debt management plan, I doubt they can be held responsible. (And I even doubt if CCCS would be able to correct the blemishes even if they wanted to.) So I am assuming the worst, that the blemishes will stay on for the next several years.

We are (now) married, in our late 20s, my credit is fine, our income level and savings base is quite comfortable, and we are both steadily employed (teacher for 2 years, and software developer for 5 years). In short, if it weren’t for those blemishes, we’d be an ideal candidate for a lender to loan money to.

So, my question is, will those marks significantly affect our chances of obtaining a home loan in, say, 2 years? (Which would be 3 years after the last blemish.)

Sorry for the long essay. Any thoughts would be appreciated! Thank you.

Answer: Can your wife provide of payment and her contract with CCCS? She has a right to have a 100 word written explanation in her credit report regarding the late pays.

She needs to contact the credit reporting agencies with the explanation (send it certified).

In our area of the country you can get a loan for a home even after a bankruptcy if your credit has been clean for 18 months. So I would think that 3 years should be sufficient. Let your loan officer know about your situation so that he doesn’t think you’re hiding anything from him/her. Hopefully you can back up your explanation with your canceled checks.

Related Posts

• I was told TO refinance..
• Home buying with bad credit?
• can I get bad credit for owing dr. bill?
• trying to buy a house
• loan
• Auto debiting instead of checks
• Educate ME!
• Mortgage Lenders for Veterans with Bad Credit?
• I do not know if this is the right spot to ask this question but.
• Can one buy when a house is listed to be sold on the courthouse steps?
• HIGH INTEREST CARDS ARE EATING ME ALIVE!!
• How do I get credit with a high debt to income ratio?

Filed under: Bad Credit Loan