I would like you thoughts!!!!

[Anonymous]

My total debt on my CR is now down to a little over 1300 spread over 7 accts. I need to start my home buying process asap. I prevously sent out PFD letters and received no response. I have one that is due to fall off next year july. Should I just pay these off and show the paid letters to my LO for a rescore? Does all of my accts have to marked as paid in order to get pre-approved? 

[Familywantsahouse]

Unfortunately, there's no "rescore" for a paid collection. It will be marked as paid on your credit, but a collection is a collection and the status as paid or unapid doesn't impact your actual score.

Sounds like you need to work different angles/addresses for a PFD agreement if you need the collections removed for a score increase, although I will tell you that you really need to get ALL or darn close to all of the collections removed for a significant score bump.

Take my equifax FICO, for example...it only had three collections accounts reporting and after removing 2 I went up a whopping point.

[jaypeedee]

Ages of the account are a determining factor.  If these are old account with only about $200 each owed, then you may not have any problem.  Your score is suffering, but as the accounts age they have less weight on your score.  Go over your credit with a LO and see what they say.  They may not require any of it to be paid.  Medical caollections def won't have to be paid back.

[StartingOver10]

Whether the collections need to be paid or not depends upon the mortgage type (conventional or FHA or USDA or VA) and the underwriting criteria in effect at the time of application.

For example, beginning July 1, 2012 (was April 1st but pushed back to July), all collections and charge off accounts including medical need to be paid or in the process of repayment (with a min of 3 months already paid) if the total outstanding is $1000 or more. That is a new rule. So, it is better for your score to see if you can do a pfd rather than just pay the debt. Speak to your LO so you know exactly where you stand.

[JusdoNit]

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@StartingOver10 wrote:

Whether the collections need to be paid or not depends upon the mortgage type (conventional or FHA or USDA or VA) and the underwriting criteria in effect at the time of application.

For example, beginning July 1, 2012 (was April 1st but pushed back to July), all collections and charge off accounts including medical need to be paid or in the process of repayment (with a min of 3 months already paid) if the total outstanding is $1000 or more. That is a new rule. So, it is better for your score to see if you can do a pfd rather than just pay the debt. Speak to your LO so you know exactly where you stand.

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HEYYYYYY. Like the way that July 1st sounds