Paying of Collections; Trying to buy a house

[Anonymous]

I spoke with a very helpful lady at BofA Mortgage.  She told me to quality for a certain loan with no PMI, I would have to pay off my collections.  I have three.  One being the famous Bally's Fitness $1300(10/2001), two being University of Phoenix $506 (6/2004), and lastly Pacific Bell $463 (6/2003).  I have been told that paying these now, after three years, would not really help my score and would then restart the clock of how long they stay on my report.  Is this really true?  I am now being told that my score would increase in 60 days if I pay.  What is the truth?  I am trying to buy a home and I have no problem paying off these debts.  I just want cake and to eat it too. 

[SmartCookie]

welcome and please start here:   http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

Paid collections are only marginally better than unpaid.  Trick is to get them OFF of your CBRs, so read the above link.  Also see the Frequently requested threads.

Paying in full will not restart the clock.  If you acknowledge these debts to yourself as correct and want to do this fastest, send out 3 PFD letters.  If anything is incorrect, dispute any OCs and dispute/DV any CAs.

Do your homework and do it well, and you'll probably wind up getting all 3 of these settled and totally removed from your CBRs within 60 days.