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Old collections don't typically need to be paid off although some programs require it. If you can get the creditors to agree to delete them from your report for payment you'd probably see an increase in your score (this needs to be agreed to BEFORE payment is made and get it in writing). If you just pay them without having them deleted it's possible your score would decrease because it often re-ages the collection making it look brand new. Having new collections (or old ones that appear new) on your report can get you denied too because FHA is looking for at least 12 months clean history.
We've had collections fall off our report and it happened at the end of the month when it turned 7 years old. For example, we had one from June 1999 and it fell off June 30th 2006. We didn't have to request it be removed although sometimes you have to if it isn't removed on time. That can take a month or two. The old collections by themselves won't get you denied. If the lender requires them to be paid you can pay them at closing but i recommend leaving them alone for now unless you can get them deleted for payment.
Most lenders are requiring a score of 620 and you're a couple points shy. An inquiry will probably bring you down a couple points too if you apply now. Do you have any credit cards that can be paid down below 10%? That would give you the small boost you need.