Rebuilding Your Credit

[aries331]

I am trying to get approved for FHA mortgage. I meet income guidelines but I have credit issues. I have car loan for a year that went 30 days late twice but now current.  I have about 7 collection accts. half are medical. I can payoff all of them for less than $5000.00 but will still take some time.   One is an old revolving dept store acct that I'm pretty sure I paid off already, but they are willing to reopen the acct with a $900.00  limit if I pay the balance off again. I am considering this just to have an open revolving acct in good standing.  Any thoughts on this out there?

[DI]

I doubt paying the collection accounts alone will increase your scores by 70 points.  If you pay for delete then you will see a significant score increase.  The two 30 days late on your installment is going to keep your score down too. 

If you can negotiate PFD's you stand a chance of getting your scores up by 70 points.  If any of the accounts you PDF is your oldest tradeline, you may see a decrease in your scores.PFD'ing an old tradeline will decrease your cedit history age.

It won't hurt to have the old account reopened long as the creditor doesnt make the account new.  If the account was opened in 2005, and they reopen it, you want to make sure they report the account opened in 2005 and not 2009.

[aries331]

Thanks for your reply. I value your response.  Where can I find a good example letter for pay for delete?

[DI]

You can search for PFD example letters on this site.  Type in PFD letters in the search window.

[LILMAN8406]

You should find a GW letter on here. And suit it to your needs, then send it to your auto loan lender. This could get those 30 and 60 day lates taken off, which will definitely help your score.