UPDATE! HELP! New collection popped up and dropped score 60 pts!

[jjmtmj126]

My husband and I are just beginning the home buying process again after 1 year ago when we got 3 days till closing and were DENIED.  All our credit cards are paid off, we have $20,000+ for down payment.  DH score is 670 and mine WAS 660...that is until 1 week ago when a new collection from an old cable bill I had in 2010 (which I was NOT aware of) for $67 popped up on my credit report, showing on all 3.  My score dropped down to 593!!!!!

I immediately paid it, but the damage was done.  I called the cable company to see if they could remove it, asked the collections company if they could remove it, both said no.  

So 2 questions.... #1, will my score go up now that it says "paid in full"?  #2, when going for an FHA loan how bad will this new collection hurt us?  I realize I'll have to wait now until my score goes back up......but I'm hoping in a few months it'll be over 620 and we can start the process.  

UPDATE:  After speaking to THREE different lenders, each one said having this new collection on my credit report will NOT hurt my chances of getting a loan, FHA or conventional!  The only thing that is now a factor is my score.....I'm hoping I'll be able to get it back up.  It's at 624 right now and I just have to get it up to 640 for FHA.....  So THANK GOD we don't have to wait a year due to some stupid $67 bill!  

[jjmtmj126]

I should also mention... in case this has any barring...  our BK cleared in July 2009.  

[Mike_B03]

Why did you end up being denied a year ago with 3 days left until closing?

[tooleman694]

Oh man..........................

This is probably gonna hold you back about a year, unless your other half could afford to take the loan out on his own.

This is a complete joke, a 67 dollar cable bill from 3 years ago stopping you from buying a house. This credit stuff is some complete bull crap sometimes I swear to god

[MovingForward_2012]

Yes that is crazy!!! I am also curious why you were denied 3 days before closing?

Your score really tanked from that collection. Typically you have to wait 12 months from the Date of First Delinquency to be approved. But if you get your score back up to qualifying range, the UW might let it pass since it is only a $67 collection that has been paid. You can include in your letter of explanation that you were unaware until it was reported to your credit reports.

The plan of action; however, should be to continue to work to get that collection deleted..this will reap the best approval odds.. As long as that collection is on your report, your score will increase very slowly as that collection is like a weight pulling your score down. The other option, as tooleman said, is to see if your husband can qualify on his own for the home you both want.

[tooleman694]

Last year I got denied they day of closing.

We were gonna close in Augest but because my Wife had made a late payment in March I was denied. This was on a non purchasing spouse, she was not on the loan and they still denied me based on her credit.

When we went back into UW on the new house, one of the conditions was that we could not close till my Wifes late payment was one year old.

[jjmtmj126]

We went through the whole process and everything was fine.....but at the last minute they said they wanted my hubby to have more time on the job. He was at his current company for 9 months..... And his previous employer for 2.5 years, same line of work. So fast forward to now...almost a year later and in a better position financially, both our scores went up....they were at 640ish.

I really find it hard to believe that with $20,000 down we will not qualify because of a STUPID $67 collection from 3 years ago. That's just crap!!!!!!!!

[jjmtmj126]

So that being said.......how can I get that collection removed?

[MovingForward_2012]

Wow! Denied because of what happened on a non-qualifying spouses credit?!? I didn't even know they did that! My husband is primary on the telephone/Internet bill but I pay it because he is a stay at home Dad. I also pay all the other expenses, which are in my name. He isn't included on the loan. Yikes! Now I'm worried that they could come up with some issue out of thin air involving my husband, I hope not!

[tooleman694]

If you have a copy of the credit report

Post that collection, editing out personal info and we can take a look for violations. That is the easy way to get it to go bye bye.