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Do all collections need to be paid to qualify for a AL?

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Anonymous
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Do all collections need to be paid to qualify for a AL?

We have been paying off collections on my hubby's credit for the past year preparing to apply for an auto loan. We got everything paid, and were ready to apply when an old credit card of $600 popped up on his credit. It has never been on his credit before, but it is 13 months from the statue of limitation and removal. Should I pay this before we go apply for the AL, or will it make no difference in approve/interest rates?

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Anonymous
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Re: Do all collections need to be paid to qualify for a AL?


@Anonymous wrote:

We have been paying off collections on my hubby's credit for the past year preparing to apply for an auto loan. We got everything paid, and were ready to apply when an old credit card of $600 popped up on his credit. It has never been on his credit before, but it is 13 months from the statue of limitation and removal. Should I pay this before we go apply for the AL, or will it make no difference in approve/interest rates?


What do you mean by just popped up?  If it shows as a new collection it could be an issue but as long as it's dated from 6 years ago it won't likely be an issue.  Having said that a paid collection is always better than an open one but as they age they have a reduced impact.  If he has good scores and no other issues its not likely to be a problem.  I  always reccomend credit unions for the best rates, get preapproved from Penfed, DCU, NFCU or a good local credit union before you go shopping.  

Message 2 of 6
Anonymous
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Re: Do all collections need to be paid to qualify for a AL?

Thanks for your reply! It says on the report the date opened was 2014, first reported was 2015, and date of status is 2016, but the first missed payment on the account was in 2011 so they won't be able to legally report on it after next year. 

 

We have been a member of the local credit union for about 10 yr,s and have had an auto loan through them in the past, that is where we planned to go first. 

 

His credit score is 660

Message 3 of 6
Anonymous
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Re: Do all collections need to be paid to qualify for a AL?

But I mean just popped up as in apprantly it's been in collections for awhile, but they just put it on his report a few months ago. 

Message 4 of 6
Anonymous
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Re: Do all collections need to be paid to qualify for a AL?

That collection is not likely to have any real impact on his credit at this point.  Make sure you know the statute of limitations in your state because some collection agencies get really aggressive and will file a law suit just before the SOL in the State.  I had this happen on a credit card I owed $700 on, they filed and wanted me to pay their legal fees and interest, knowing they would get a judgement I hurried up an negotiated a deal with them.  

Message 5 of 6
Anonymous
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Re: Do all collections need to be paid to qualify for a AL?

Thank you, I think we will go ahead and try without paying it and see what happens. I just had that happen a year ago with a credit card I had in collections! They sent me a letter from a lawyer and I sent back asking for proof the account was mine, etc etc. Never heard back from them. That credit card will be past SOL next year. I hope I don't hear from them again LOL! SOL in my state is 7 yrs so I would much rather wait for it to drop off! 

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