working my ass off to get my credit up for a mortgage but running into some issues...advice needed

[Anonymous]

So my mortgage lender is going above and beyond to get my credit up so that we can use my income for our mortgage. She spoke to someone at the credit bureau and they went through each of my old debts and collections. The credit bureau said if I paid off an old Macys account that it would boost me 60 points. Now, I keep reading that paying off old collections won't help my Fico. Who do I believe?

[kc0039]

Sometimes they do, sometimes they don't. It depends on each individual credit bureau. I would run a simulator and tell them it's not perfect, but it would go higher if you do certain things. All you can do is believe what the credit bureau says since the collection will be off your report soon

[Anonymous]

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@Anonymous wrote:

So my mortgage lender is going above and beyond to get my credit up so that we can use my income for our mortgage. She spoke to someone at the credit bureau and they went through each of my old debts and collections. The credit bureau said if I paid off an old Macys account that it would boost me 60 points. Now, I keep reading that paying off old collections won't help my Fico. Who do I believe?

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I swear I've read somewhere that paid off collections DO help your mortgage score, but can hurt your FICO 8 due the updated reporting.  I'm sure one of the mortgage experts can give more insight.

[VALoanMaster]

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@Anonymous wrote:

So my mortgage lender is going above and beyond to get my credit up so that we can use my income for our mortgage. She spoke to someone at the credit bureau and they went through each of my old debts and collections. The credit bureau said if I paid off an old Macys account that it would boost me 60 points. Now, I keep reading that paying off old collections won't help my Fico. Who do I believe?

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Is it reporting as a collection or a charge-off? The only time I have ever seen a collection account improve the scores is when it gets deleted. The reason why is because a collection account is coded in the scoring model as a derogatory account so it will always have negative affect on your score, regardless of the status. An account that has been charged-off is simply an account that is currently in a derogatory "status" so if you pay it off, it changes the derog status to a positive status & your score goes up.

[Anonymous]

It's showing closed/charge off, but I'm having to pay through a credit corporation. Macys won't take my money

[Anonymous]

With my personal experience, I settled my Collections and my mortgage scores increased but it didn't do anything to my FICO 8 scores.

[Anonymous]

What is the difference in mortgage scores?

[Anonymous]

I would suggest posting this over in the credit rebuilding forum. They might just have the answer for you. I have visited there myself often.  There might be some info there on the best way to handle this charge off account and how it will affect your score.

How many CC's do you have reporting every month and how much. The trick to boost your score is to have all CC's report 0 and just one reporting less than 9 percent. I usually let around 20.00 report on that one card.