LOAN experts - PLEASE ADVISE

[newmom24]

My lowest score needs 102 point boost by 12/2008 (I prefer in the next 60 days). I was approved for a loan but it would deplete my savings and i refuse to do that. The loan consultant advised me to keep making my payments on time, make sure I have no new collections in the next 6 months and I should qualify w/out depleting my savings for a FHA. My question is: should I pay off the open collections on my credit profile? could that improve my score?

The collections were assigned as of Nov. and Dec. of 2007. So they will be outside of the year by years end. Please advise.

THX

[ShanetheMortgageMan]

I'd only pay them if the creditors are OK with the pay-for-delete method (where you offer to pay in exchange from them deleting the collection from your credit report, not just changing the balance to $0), otherwise paying off collections would update the date of last activity to 6/08 (or whenever you pay them), bringing down your scores a bit.  However I'd speak to a loan officer proficient in FHA to determine if you'd even need to pay them or not, if you have clean credit for 12 months (meaning you'd buy in 11/08 or later), and you qualify otherwise, then odds are you wouldn't have to pay the collections in order to fully qualify.

[Anonymous]

I have a question. Something popped up on my credit a few months back (an old T-mobile bill) that I assumed was mine. When I spoke to the collection agency they said that if I pay they would take it off my credit report but they didn't and when I contacted them they said they don't delete collection accounts. Now come to find out the account wasn't mine, which would explain why my name was spelled wrong in their files. I'm not sure what to do outside of disputing it with exq, exp, and tu.