Spoke to a lender today and I'm slightly confused

[skinsfan83]

Hi everyone,

I spoke with a lender today and she said that my score was 629. She wants to get me to a 640. I have a $825 judgment on my report that I already knew I would have to pay before I was qualified. When I pulled my reports last night, I saw a few small collections that were all over 3 years old. She didn't mention those but when I mentioned them she said she wasn't worried about them and that the report she sees is different from what I see. However, I do have a charge off on my report from CAP-1 auto for $6,000 for a car that was totaled and not fully paid off by the insurance. This happened in 2007. When I pull my report it says it will come off 2/2014. When I told her this, she said that things don't fall off reports anymore. The law has changed. She suggested I send a letter to CAP-1 telling them the situation with my car (bad accident, no job, etc) and see if they will delete. She said that they are still reporting every month. She also wants me to get my balances on my credit cards under $150.

My main issue is the car situation. I'm not sure what I should do. I do owe the money. They have never come after me for the money, not even through a collection agency. If I set up a payment plan, from my understanding that restarts the SOL and I don't want to do that either. I'm not sure what I should do.

Can someone please advise? Thanks so much!

[p-]

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skinsfan83 wrote:...I have a $825 judgment on my report...a few small collections ...a charge off on my report from CAP-1 auto for $6,000 for a car that was totaled...get my balances on my credit cards under $150....I'm not sure what I should do.

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Start by checking the SOL on the charge off.  You need to know if they can sue you still, or if it's too late.  If it is outside of SOL, you might consider contacting them to see if they will accept partial payment in exchange for deletion, or if not, offer partial payment in exchange to mark it "paid in full".  If you are inside of SOL, I would be very nervous about alerting them.  Chances are they will sue.  As usual, your first contact should be a debt validation letter to make sure all is right.

I would not recommend going into a payment plan, unless it's a last ditch effort to stay out of court.  Entering into a new payment agreement can have an adverse effect on your file as they will update the account to reflect it, and it may appear more recent.  Really the only reason for you to contact them is to make a settlement offer.  Negotiate the best deal you can, get the terms in writing, and don't sign anything they send you.  Watch for gotcha's like consent judgements, etc.

Also, it would be smart to opt out of prescreened offers if you haven't already.  That will keep some things from waking up on their own.

The credit card balances have a big effect.  You should have only 1 card showing a balance at statement time, and the total should be 3 to 9 percent of your total available credit.  3 percent is better in my experience.

If you have small collections consider offering a PFD to clear them.  Every point helps.  

Is the 825 dollar judgement paid?  If not, you should probably get it taken care of.  They can keep renewing and it will haunt you.

[stevieswife2011]

Well i can tell you that i am in the mortgage buying process and have 2 small collections from 2010 and my LO told me not to worry about them.  I am in the last stage of underwriting waiting on a clear to close and have already been through one round of conditions from the underwriter and have not been asked to pay the collections.  i did have to provide a LOE for them but i have not paid them.  So i can say that sounds ok that she is not worried about small collections from years prior.  I agree to opt out i ddi that late (after applying) but nothing has come up *fingers crossed* i think it is just a safe guard to protect yourself while you are going through this process

[Kathy4NU]

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@skinsfan83 wrote:

Hi everyone,

I spoke with a lender today and she said that my score was 629. She wants to get me to a 640. I have a $825 judgment on my report that I already knew I would have to pay before I was qualified. When I pulled my reports last night, I saw a few small collections that were all over 3 years old. She didn't mention those but when I mentioned them she said she wasn't worried about them and that the report she sees is different from what I see. However, I do have a charge off on my report from CAP-1 auto for $6,000 for a car that was totaled and not fully paid off by the insurance. This happened in 2007. When I pull my report it says it will come off 2/2014. When I told her this, she said that things don't fall off reports anymore. The law has changed. She suggested I send a letter to CAP-1 telling them the situation with my car (bad accident, no job, etc) and see if they will delete. She said that they are still reporting every month. She also wants me to get my balances on my credit cards under $150.

My main issue is the car situation. I'm not sure what I should do. I do owe the money. They have never come after me for the money, not even through a collection agency. If I set up a payment plan, from my understanding that restarts the SOL and I don't want to do that either. I'm not sure what I should do.

Can someone please advise? Thanks so much!

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Personally, I think there is a lot of wrong information this lender has said.  I would be hesitant of using this particular person.  You could mess up your file and not qualify.  Not worth the risk.

Are you in a situation that you can wait for it to fall off??  I have noticed that numerous items on my credit file fell off before the date it said it would.  Sometimes 90 days before.  I would not wake the sleeping giant on that one.  

[p-]

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Kathy4NU wrote:.. I think there is a lot of wrong information this lender has said.... I would not wake the sleeping giant on that one.  

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Yup.

[skinsfan83]

I spoke to another lender and he sort of told me the same thing that she said. I'm thinking that since that pretty much is the only "big" thing that is stopping  me from qualifying, they are just telling me to do it so that they can get my business. What I don't want to happen is to start paying and then they sue me because the SOL restarts. Am I in a rush to buy? Sort of. I would be saving about $600-$700 a month between buying and renting. ( I live in the DC area). There a many programs here that are pretty much throwing down payment and closing cost funds at potential buyers and I don't want to miss out. I was thinking about disputing it since I've never even messed with it before to see if it will just fall off.

[p-]

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@skinsfan83 wrote:

I spoke to another lender and he sort of told me the same thing that she said. I'm thinking that since that pretty much is the only "big" thing that is stopping  me from qualifying, they are just telling me to do it so that they can get my business. What I don't want to happen is to start paying and then they sue me because the SOL restarts. Am I in a rush to buy? Sort of. I would be saving about $600-$700 a month between buying and renting. ( I live in the DC area). There a many programs here that are pretty much throwing down payment and closing cost funds at potential buyers and I don't want to miss out. I was thinking about disputing it since I've never even messed with it before to see if it will just fall off.

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If you dispute it, they will get a request for verification from the CB.  That might shine the light on your file, and make it more likely that they will sue.  Once they know you have something to lose, they may exploit the leverage.

Your best option is to come up with 3 to 5 grand, contact them, and offer to settle in exchange for deletion.  Expect it to get interesting.

Good luck,