Do you think I can qualify for a mortgage by usinmg this method?

right now, my credit score is 570, I applied for FHA but was denied. My plan is to open up a secured credit card at a bank, make on time payments, keep balances low, and then once a positive relationship is established, I apply for a mortgage. Could my bank know I overdrawn my account in the past. In 7 years when all my collections and charge offs fall off my account, and my positive on time payments with secured credit card, would this be good enough to be able to get approved for a mortgage? I heard of mortgages with 0 down, just pay PMI I do not want to apply and get a lot of inquiries


Your plan is a good one but don't expect quick results. It takes time to come back from a terrible 570 credit score.

Rick B

You can't be this dumb. You obviously are in no position to handle a mortgage and an emergency fund. Save up an emergency fund of 3 to 6 month's expenses, save up a 20% down payment, then apply for a 15 year fixed mortgage. While you are doing all of this savings, pay your bills on time and pay your credit cards in full each month. Of course you can chose to put less down, but that is a dumb financial decision. Why pay PMI instead of paying for equity in your home???


PAY IN FULL every month. No need to carry a balance.


Yes, you bank will know you overdrew your account in the past, they may or may not allow you to get a secured card, but give it a try. If you get it and use it responsibly your credit score may go up. 300-629: Bad credit 630-689: Fair credit, also called “average credit” 690-719: Good credit 720 and up: Excellent credit So currently bad. Once it hits the 700 range you can apply for a mortgage with a good 20% down payment and see if you are approved. It's going to take some time of course. Good luck.


How recent were the overdrafts? Debts and collection do NOT "fall off" your account or anyone else's. It isn't just about credit. You need sufficient income and job history too.


You are going to need a down payment of at least 5% even if your score improves a great deal. A secured card is ok but its a low limit and it does not prove much. Better would be a credit builder loan for a larger amount over 12-24 months. It would also force you to save because you don't get any money upfront. I think you are years away from being prepared to buy a house.


Only if in that time you improve your credit score enough.



Ron Paul 2012

you might qualify in a couple years but to increase your odds, have a large down payment

Casey Y

Anyone thinking $0 down but willing to pay PMI is an idiot. Sorry...that's just my opinion...but one shared with other people who have actually reviewed the numbers. Can you not qualify for a standard credit card? Secured cards are fine and I bet you can get out of a secured card before 7 years. If you can keep yourself clean for 7 years (which you cannot, but we can play this game), then you might qualify for a mortgage.

real estate guy

If you have a 630 credit score you should be able to get a FHA loan. I see this everyday. This is what you want to do. You don't have to wait 7 years. First, talk with a lender and have them pull your credit report. See what the issues are. If there are collections, PAY THEM OFF IN FULL NOW. And then have the lender do what's called a RAPID RESCORE. This may increase your score to the 630. But let the lender tell you what to pay and not pay. In regards to a secured credit card.Yes, open a secured credit card. The credit limit DOES NOT MATTER. $200 is enough. The key is to ONLY!!!!!!!!!!! use 40% of the credit line. So if you have $200 limit, NEVER, NEVER, NEVER use more then $80 a month. AND always pay in FULL each month and ONTIME. If the bank increases the limit (which they will if you do 40%/pay ontime and in full, DO NOT ALLOW them to increase it. It will NOT help you increase your credit score. Yes, there is a loan program called USDA. It's 100% loan and has much lower "PMI" then FHA. Talk with a lender. I understand you don't want to many hits. But you are allowed around 3 mortgage hits a month.


you can try and then you'll know if you can qualify or not