550 credit score gets me nowhere!!!

[ashleynicole8708]

I'm 22 years old and trying to purchase a home with my fiancee. We are expecting our 2nd child in August and are being denied for a mortgage loan because our credit is in the 550's. I've done ALOT to my credit the past year. I paid off 2 medical bill collection accounts, paid off a cell phone collection account. The credit cards I've had since 2006 and 2007 I've only been late on 1 time for 30 days. My useless credit cards I paid off and closed. As of right now I have 2 visa's and a department store credit card. I have a 2 year loan that I pay every month on time. I have 1 more year left before its paid in full. I've had 2 other loans for a couple thousand dollars that I paid on time every month AND paid off early. I cant understand WHY my credit is so horrible. I've taken care of my debts. The mortgage person told me that my problem is being maxed out on my credit cards. My credit limits on my cards are a measly 1000 dollars, 400 dollars, and 500 dollars. He told me if I paid these off to a 0 dollar balance and kept them that way for a few months that my score would skyrocket to the 620 I need for the mortgage loan. Is this correct? Also, would the credit company agree to delete my 1 past due payment from my report if I pay the card off and promise to never be late again? The collection accounts I paid off can I kindly ask them to please delete it from my account. Even though it says "Paid" its still killing my score. Anything else I can do? We need to start the loan process around the time our baby is due...I want to correct this quickly. I'm lost.

[Scorepro]

Your score--as you are learning--is made up of more than just what accounts appear on it. There are tons of variables that go into it--too many to post. From what you describe, you have issues not only with the accounts that appear, but with your debt to credit ratio. If you pay some of those down to keep them at 40% or less of the credit limit) that will help. As 4 the one 30 day late, try a goodwill letter to the creditor. How long ago was the 30 day late?

On the collections-these impact your score a lot. How recent were these? The issue you will have Is that you already paid them so they have no incentive to take them off and u have no leverage.

You are also pressed for time and you time to learn the system. I would recommend you pay a professional to help you.