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03-01-2010 01:42 PM
My wife and I have been shopping for a mortgage the last month and everywhere tells us 620 score needed. One lender last week pulled my score and it was Ex: 598 EQ:537 and TU: 553. This week one lender pulled my score and it was EX :565 EQ: 530 and TU: 565. I just can not believe that in one week my credit score with Experian went from a 598 to a 565, a 33 point difference ! On Feb. 4th this year, I pulled it my self it I had an Experian Vantagescore of 615! Also, Each lender I have talked to said you must pay off all collection accounts, SO promptly today after hearing this drop, I called up and promptly paid off each and every Collection of mine except for one , where it was "charged off" in Oct of 2008. By doing that will it increase my Credit Score and by how much? I did obtain letters from each company reguarding the pay offs. Also I am self-employed, My taxes for 08, state I made 4K profit and combined with my wife's equaled 18k (I actually made 30k but I was able to write most of it off), On 09 taxes, I was the sole provider as my wife lost her job and worked with me. We made 80k last year but again our AGI was 38k. I have bank statements that show I make deposits in access of 10k a month. Therefore after paying off these collections , should I be in a better spot to be approved for a loan? SHould my score rise by paying off these collection and if so how much? I only have one credit card whose balance is 200 dollars and a New Car Loan that is 4 months old.
03-01-2010 01:56 PM
That's one thing about lenders. Paying the collection will not raise your scores. If anything, it will cause a minor drop because of the DOLA. I don't believe anything lenders tell me anymore. I've been lied to three times now in the past two years, trying to do the right thing by their "advice".
Your best bet is a PFD to those who haven't been paid, and a whole truckload of GW letters to the paid collections, begging to have the CA "accounts" on your CR deleted. The Credit Rebuilding page has a lot of help regarding the effects of collection attempts, etc. Head over there and see about GW letter formats.
Also, the only possible good from the paid collections is when your mortgage folder hits manual review at the Underwriters. That is if it hits manual, and not just a regular kick out.
Good luck! We are still trying, but after following the advice of one lender and ignoring my collections, I am paying for it now.
03-01-2010 02:20 PM
03-01-2010 04:03 PM
Since they were paid before getting the removal that's probably why you suffered the ding on your report. Getting them removed will jump your scores right up, possibly right at the mark or a little above it.
If you got the promise to delete then you should be good as soon as they update. Sometimes, you can take the letter where AFNI promised to delete over to your lender so they know. Also, they have a rescoring thing where they will pull your credit report again, when you know they fell off.
03-01-2010 08:59 PM
A couple things...
PFD letters are not binding so just followthorugh with them if they do not take action. They can not be forced to remove something that is acccurate even if they agree to a PFD (although if you got it in writing you are probably OK)
Income is going to be an issue. Cash flow does not mean anything to an underwriter. What they will base it on is your income reported on taxes for the last 2 years, and being self employed, they will average the last 2 years. That means (18K + 38K) = 28K per year income.
28K income means: 2333 per month income
roughly 1000 per month for total debt payments (loans, credit cards, mortgage)
roughly 700 mortgage debt max (but all debt still under 1K.
I do not know what your other debt is, or what the housing market you are is, but that is a fairly limiting amount for most parts of the country.
02-24-2011 10:50 PM
i had a collection account through afni..and i was offered a settlement. and was told it will be mark down as paid/ lesser then amt settledor whatever...im just wondering since i had made that payment and it had already appeared in my credit..how much will my scored drop? or raise? and is there a way if i can get it offically removed completly?