Need help

[bullitt149]

I need some help,
I have worked extremely hard rebuilding my credit over the past 5 months and am currently in the process of buying a new home. My file is going to underwriting this week with DHI and I received a notice from my credit monitoring that a collection from an old account hit my Experian on Friday. I need to know how to handle this. It's a small balance of $500 so I can pay it but will I need to do PFD at this point. The loan officer pulled my scores 2 weeks ago and I was a 640 mid score and it was Experian that gave that score. Will they pull scores again before closing? I need to get on top of this and need to know what to do.

[pdog661]

Hi,

When do you go to close? 

Most loan companies will soft pull your credit through out the mortgage process.  They will normal also soft pull a day or two before close to make sure nothing has changed. 

In regards to the debt:

First off is the debt legitimate?

Have you sent a letter asking for the debt to be validated?  The creditors should not report the account if the debt is under dispute. 

If legitimate you need to speak with you LO and let them know what is going on.  Honest is the best policy, and they will normally find the collection account on their own so letting them know just gives them more time to work it out with you. 

Also....... make sure to stay calm...... I am sure this is very stressful for you, but remember this happens everyday to hundreds of people, and it can be worked out.  It will be okay.

[bullitt149]

Thank you. I will try and stay calm while I'm freaking out! LOL
I am scheduled to close the last week of this month. The debt is legit from 2 1/2 years ago. I received a letter from them and called to find out what is what's. he said it had not been reported to my credit and I told him would call back on Monday and pay it. Turns out they reported it the same day I called. Should I attempt to do a PFD? I have already left my loan officer a message to tell her about this when she calls me back.

[pdog661]

It's a shame this has happened.  Never a need to make a stressful process even more stressful. 

Have you pulled your scores from here?  Underwritting will only require that is be paid in full if your score is still within the approval range.

Are you going FHA or conventional?

Depending on your file this may keep you above FHA guidlines. 

I would try PFD either way just to make it easier.  Make sure you get the PFD in writing from the collection agency.

[bullitt149]

I'm doing FHA

[pdog661]

I would spend the 30ish bucks to pull both here, and see if you are still above 626.

What else is on your credit file?

How many baddies, current UTL, AAoA, Inqs...... maybe there is something we can do to add points if the drop is below the threshold.