- 6 years ago
I am a regular poster going anonymous because well… I’m about to divulge some credit scores!
My husband and I have been married about a year. We were hoping to start the process of buying a house. We ran our credit reports. We saved a down payment.. We’re looking for a $200,000 house and based on our incomes we would easily qualify.
We have been talking to an agent and we decided we were finally ready to go to the bank and get preapproved.
My credit score was an immaculate 802. My husband’s? 628.
That’s subprime territory. As in, can’t qualify for a loan, at any rate.
We were both shocked because when we bought our scores on our own, his score was actually showing higher than mine! Turns out the score that Experian sells to consumers is something called a VantageScore which calculates things differently than the FICO score the bank gets. Also it turns out the 3 credit reporting agencies often have different items on them… 628 is his middle score.
About 3 years ago he went through a difficult time with job loss and he had some late payments. He got a new job and immediately paid off everything 100%. However then he made a big mistake: he closed all the credit cards. These were $10,000 lines of credit that he closed.
His new mantra was totally anti-debt. He owns his car (no loan). For 3 years he has used only a debit card. We paid for the engagement ring, wedding, and honeymoon in cash. The one thing he has left is $30,000 on his student loans (grad school). He makes triple payments on the loan.
But when you have no existing credit lines, no credit payment history for the last 3 years and late payments/collections from even several years ago, it adds up to a shit storm of no credit/bad credit. All this time he has been Superman about managing his money but it doesn’t show up on his credit report. since he wasn’t using credit lines.
I have to admit that I yelled at him. Which wasn’t fair, because I already knew all these things about his financial life. I guess I just didn’t think it could be that bad. I literally cried all the way home – we were hoping to own a home by August of this year and now who knows.
We immediately got him a Capitol One card with a $1,000 limit for him to use at the gas station and the grocery store so that it will show up as being used and that it gets paid off every month in full. No balance. I am sure the inquiry for that card dinged his credit further but we have to start somewhere.
The loan officer at the bank was also trying to be helpful and he said that to get a loan through them, the minimum credit score is 640. So almost there but not quite. He also mentioned something about FHA mortgages and maybe just putting me on the loan with my 802 score.
The thing is I make about 1/3 of our money, my husband makes 2/3. All by myself I don’t have very much purchasing power.
So he’s got the income and I have the credit.
Perhaps I could get the loan and he could come on as cosigner so we could use his income. I guess this is something done through FHA? I read different things about the minimum credit the applicant and cosigner must both have for an FHA loan, some say 620 others 590. But if they use his income won’t they also look at his credit?
Does anyone know anything about this stuff? How long will it take us to get his credit score up? What’s the best way to do it? Should we take our down payment and use it to pay off a huge chunk of his student loans? Have you ever used a cosigner for a mortgage?
I am sorry for how long this is. I’m so distraught. I’m a dork but now when I click on Apartment Therapy or Young House Love I feel this surge of sadness!!! First world problems, yeah I’ve got them.