@movingonup23 wrote:Ok, so I have gone back and forth with the attorney and been ignored by Asset acceptance. Asset replied to my email via the attorney (without my knowledge until I called the attorney) and said if we settle they would report as paid/settled but they are legally bound to report accurate information (blah blah blah). It's not reported now so my argument is it doesn't have to be reported after.
Anyways, we have agreed on a settlement of $4,000 (42% of the balance) paid by January 29th. My hope is that the account does not get reported since my home loan is set to close on March 10th (I got the pre-approval last week). I am going to pay by check on January 29th since the attorney has to hold the check for 30 days to make sure it clears. Hopefully I'll be closed before they do report the collection as paid.
My new question is:
Does anyone have an educated guess as to how much my credit score might decrease if it reports now? This account's DOFD was August 2009, so it is over 4 years old. Here are my stats:
FICO Equifax: 708
FICO Transunion: 735
2 negative accounts (both CC) that have been paid/settled from 2008.
3% utilization on credit cards total. One card has 20% utilization the rest 0. Total of 5 cards, with total limit of $30,500.
No late payments since 2010 on anything.
I have student loans and a car payment and never been late on any of those.
Yikes, that's a tough one. First, how cash-strapped are you going to be between the $4,000 settlement AND closing on the house? I only ask because you might be able to "insulate" some of the damage by paying down that 20% util card to 10%. As far as the collection itself goes, timing is going to be crucial. I will say that once Asset has a local attorney handling the account, it seems the likelihood of it ever making it to your credit reports is diminished. I had a local attorney representing Asset trying to collect, and they went as far as trying to file suit (the debt was out of SOL). All the while, this thing never hit my CR.
However, let's assume a worst-case scenario. You send them a check, and it gets cashed on the 29th. The attorneys reconcile the account with Asset and their records get updated to paid/settled for less than full. Still on the worst-case scenario, this would probably happen in February. Let's say this automatically triggers their process which sends out the update to the CRBs. I hate to say it, but if your payment deadline is the 29th, in all likelihood, IF it's going to get reported to the bureaus, it will probably do so before March 10th.
In terms of damage, collections can do wildly different things. If they mis-report it as a "new" collection, you might take more of a hit than if they report it with an accurate date. Now, I doubt that either way, the hit will be enough to completely disqualify you (and that's if the lender does another pull the day of or the day before closing). However, if you're going conventional, the hit could definitely change your interest rate. If you're going FHA, you might not even see a penalty.
It sucks that they all of a sudden put the ball back in your court when your less than 3 months away from closing. The typical rule of thumb is to not touch anything in the months leading up to trying for a mortgage. Obviously, this one is different since it seems like you tried to DV Asset a long time ago and they only just showed up.
Is it possible to get an extension on the payment? That way, you can be more assured that the account won't update until after closing. I'm just thinking that with paying on the 29th of January, you're running a big risk that it could show up on your report if the lender does a late-game pull.
Starting Score: 614Yeah, they like to play hard ball. I talked to a few loan officers around here (southern NH area) back in November about USDA, and their general rule of thumb was that anything over a 660 was typically OK. You're right in that even if this does show up and the bank catches wind of it, it will show up as paid. You'll have no other obligation to do anything with the account. I really wouldn't expect it to drop your score the 40-60 points necessary to completely knock you out of the running.
It really seems like Asset is getting back into the business of trying to initiate lawsuits lacking the legal ability to do so, or lacking the intention to actually follow through with them. When they sued me, I had all of my evidence prepared to show that the SOL had expired, and they didn't even show up.
Also, if you get served papers, DON'T just disregard them. I've seen stories of this happening to other people, and they ignored them because they already had an off-the-record settlement in the works. Make sure you keep the district court clerk in the loop and triple check to make sure that all your bases are covered. You do not want a judgement reported. Once the case is filed with the court, they won't know if you've settled privately with the collector.