Which one of these scenarios is better for my credit?

[jg1983]

Without getting into all the details here is my situation. I had a car loan with a bank (which I wont name) for about a year and I refinanced it in December with DCU. June of last year the original bank reported me 30 days late on my credit in error. Without going into long drawn out details they violated the FCRA and I got an attorney to file a lawsuit against them. We received a settlement offer today. I'm pretty happy with what they are offering except they told my attorney they can't remove the 30 day late from my credit report. Instead they offered to remove the account completely from my credit report. Now that I got the details out of the way my question is am I better off FICO score wise keeping the account with the 30 day late on it a little over a year ago or am i better off taking a hit on my age of accounts so that I would have no negatives whatsoever on my credit? As far as other accounts go I have the DCU car loan starting last December, a CLOC, personal loan and 7 credit cards all starting arounf February or so. All of those accounts have a perfect payment history. The only problem is my utilization is high which I'm working on. My FICOs are around 630, 620, 595 and my goal is to get my medium FICO to 640 as soon as possible so I qualify for a USDA home loan. That is why I am wondering which scenario would be better for my FICO score.

[Anonymous]

The mortgage models are pretty unforgiving when it comes to derogs (e.g. lates, etc.).  This is as opposed to the later scoring models (FICO 8 or 9) which do a better job of softening the impact of a Day 30 late, once it gets to be 2+ years old and if the consumer has since shown good behavior.

Because you are looking for a mortgage you should jump at the chance to have a clean profile.

Pay down your credit cards and get a clean profile and you'll be fine.

[jg1983]

That is the way I was leaning on this. I have plenty of accounts in good standing but they aren't as old as the car loan. If the 30 days late will have an impact on a mortgage I think I will just have the account removed and let time fix my age of accounts problem.