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Collection from a hospital

Collection from a hospital

My goal is to purchase a home in about a year after I increase my credit score from 554.  However I've been reading that you need to have closed collection accounts inorder to be approved for a loan.  I have a collection of $10k from a hospital, do I need to pay that off before pursuing a mortage?  Thanks in advance

4 REPLIES
Super Contributor

Re: Collection from a hospital


mackandblues wrote:

My goal is to purchase a home in about a year after I increase my credit score from 554.  However I've been reading that you need to have closed collection accounts inorder to be approved for a loan.  I have a collection of $10k from a hospital, do I need to pay that off before pursuing a mortage?  Thanks in advance


You'll very likely have to pay the collection as a condition of being approved, unless the collection doesn't belong to you.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Senior Contributor

Re: Collection from a hospital

Because that collection is so large, and because it could turn ito a judgment and you could be sued ( and then the judgment would be on your house ) - no lender will approve you as they need to be in "first position" if you default on the house payments.

There are way to deal with medical collections - arranging to pay a percentage, "PFD" which means Pay for Delete, or you can google "HIPAA MEDICAL COLLECTIONS" which explains a process to go about removal, though it requires payment.

Good Luck.
STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Super Contributor

Re: Collection from a hospital


pizzadude wrote:

mackandblues wrote:

My goal is to purchase a home in about a year after I increase my credit score from 554.  However I've been reading that you need to have closed collection accounts inorder to be approved for a loan.  I have a collection of $10k from a hospital, do I need to pay that off before pursuing a mortage?  Thanks in advance


You'll very likely have to pay the collection as a condition of being approved, unless the collection doesn't belong to you.


 

 

wrong

 

 

Retired Lender
Super Contributor

Re: Collection from a hospital

how old is the medical collection?

 

i have seen files close with large collections.

 

 

Retired Lender