Collections & Mortgage Qualification

[RunningMama2012]

Hi, i'm new to the boards so please be patient. I'm here to learn and very open to advice! Primary question is how to raise my scores and how to handle previous derogatories on my account, but here is all the information i think is pertinent...

Goal: qualify for a mortgage this year (the sooner the better). My work offers a $15,000 grant to purchase a home in the neighborhood, but that locks me into this job for 5 more years (that's how the grant is forgiven), so I'd like to utilize it now instead of 1 or 2 years down the road.

Financials:

$9000 savings

$37,750 annual salary

8% credit utilization currently reporting, although it's actually about 3% since i just paid my CC bill (this is huge for me... i've paid it down from the previous 70% utilization and now just use my card for $200-$300/month to maintain some utilization and continue to show on time payments. that's the right thing to be doing, correct?)

$58,000 in student loans (paying approx. $385/month)

scores:

TU - 664 (myFICO)

EX - 666 (i've been reading that this might not be accurate? it's from the experian website)

EQ - 636 (myFICO)

length of credit history: 9y4m (average age 6y)

NEGATIVES

Late Payments:

30 days (Nov 09) - Nord Fsb

30 days (Jul 11) - Elan

60 days (Nov 11) - Elan

30 days (Jul 11) - Cap One

Collections paid off:

$225 Medical (Assigned Dec 11)

$446 Medical (Assigned Jan 10)

$809 Medical (Assigned Jan 10)

*** Question: all are paid in full and reporting on all 3 CR's. is this a situation i can use the HIPAA letter? if so, how do i go about doing that? will that help raise my score?***

Open collections:

$154 (Assigned June 12)

***this is for a CenturyLink/Qwest internet account that was never used... the internet service wouldn't work at my house, so i terminated services within a week of opening and they said on the phone there was no fee since the services were never used. Clearly there was a fee and I found out about it when the account was assigned to collections. It is only reporting on TU (currently), not EQ or EX, so my question is how to handle it. I can pay in full - should i request a PFD? do i attempt to contact CenturyLink? If i pay the collections agency (Pinnacle Financial), does that help or hurt? At this point, i'm "happy" to pay it... i just want to do it in the best way possible that will help me get a mortgage.***

is there anything else i can be doing at this point to help increase my score?? thank you for your advice!

***ETA: for the late payments, are those worth sending out GW letters? the 09 Nordstrom was right after my son was born and i legitimately thought i'd paid my bill. the lates in 2011 were right after my best friend died and i was a total wreck, not thinking about bill due dates or much of anything. if GW letters are worth a shot, i will absolutely send them. My payments have all been on time since then, and they were relatively isolated incidents.***

[guiness56]

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@RunningMama2012 wrote:

Hi, i'm new to the boards so please be patient. I'm here to learn and very open to advice! Primary question is how to raise my scores and how to handle previous derogatories on my account, but here is all the information i think is pertinent...

Goal: qualify for a mortgage this year (the sooner the better). My work offers a $15,000 grant to purchase a home in the neighborhood, but that locks me into this job for 5 more years (that's how the grant is forgiven), so I'd like to utilize it now instead of 1 or 2 years down the road.

Financials:

$9000 savings

$37,750 annual salary

8% credit utilization currently reporting, although it's actually about 3% since i just paid my CC bill (this is huge for me... i've paid it down from the previous 70% utilization and now just use my card for $200-$300/month to maintain some utilization and continue to show on time payments. that's the right thing to be doing, correct?)

$58,000 in student loans (paying approx. $385/month)

scores:

TU - 664 (myFICO)

EX - 666 (i've been reading that this might not be accurate? it's from the experian website)  No, it isn't a real FICO.  EX hasn't sold their FICO score to the consumer since Feb 2009.

EQ - 636 (myFICO)

length of credit history: 9y4m (average age 6y)

NEGATIVES

Late Payments:

30 days (Nov 09) - Nord Fsb

30 days (Jul 11) - Elan

60 days (Nov 11) - Elan

30 days (Jul 11) - Cap One

Collections paid off:

$225 Medical (Assigned Dec 11)

$446 Medical (Assigned Jan 10)

$809 Medical (Assigned Jan 10)

*** Question: all are paid in full and reporting on all 3 CR's. is this a situation i can use the HIPAA letter? if so, how do i go about doing that? will that help raise my score?***  Are these collection agencies reporting?  If so, just send GW letters and ask for removal.  Paid collections do not help your score.  They are scored for being a collection.  Getting them removed is the only way to see an increase.

Open collections:

$154 (Assigned June 12)

***this is for a CenturyLink/Qwest internet account that was never used... the internet service wouldn't work at my house, so i terminated services within a week of opening and they said on the phone there was no fee since the services were never used. Clearly there was a fee and I found out about it when the account was assigned to collections. It is only reporting on TU (currently), not EQ or EX, so my question is how to handle it. I can pay in full - should i request a PFD? do i attempt to contact CenturyLink? If i pay the collections agency (Pinnacle Financial), does that help or hurt? At this point, i'm "happy" to pay it... i just want to do it in the best way possible that will help me get a mortgage.***  You can contact Centurylink and see if they still own it.  If they do tell them you will pay if they recall the debt from the CA before you pay it.  If not, see if the CA will do a PFD..

is there anything else i can be doing at this point to help increase my score?? thank you for your advice!

***ETA: for the late payments, are those worth sending out GW letters? the 09 Nordstrom was right after my son was born and i legitimately thought i'd paid my bill. the lates in 2011 were right after my best friend died and i was a total wreck, not thinking about bill due dates or much of anything. if GW letters are worth a shot, i will absolutely send them. My payments have all been on time since then, and they were relatively isolated incidents.*** It is always worth a shot to send a GW letter.  All they can say is no.

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