Expert: Larry Batch - 3/28/2005

Question
I know I have already asked you this question before, but my email account had blocked responses from this site as spam.  I have now resolved the problem and wish that you could possibly help me once more.

I will be looking to purchase a home in the next year or two.  My credit scores right now range from 596-615.  They are low because of late payments and one account being turned over to a collection agency (which has since been paid in full).  Will a year be long enough to raise my score up enough to qualify for a home loan?  What sort of interest rate will I be looking at?  Will a 10% down payment be enough?  What about 7% or 5%?  By the time I try for a loan, I will only have 2 sources of outstanding debt:  a car loan and a student loan.  All other balances will be paid off.
Thank you for your time and patience.

Answer
First off rates are climming and if Greenspan keeps raisng rates we could see 8%. you should make sure collection agency shows debt paid off to all the credit bureaus. establish some credit. best if you have cards now. don't pay off balances if you have on time history. try to increse credit lines and pay on time leavving small balances. don't establish new accounts. try talking to existing credit holders for a lower rate. new credit will not have a history.