Hello! I wanted to post on this forum cause I need some advice on credit worthiness for myself and my spouse. To preface, we wanted to buy a house this year and were approved for a FHA loan in the amount of $200K. During the course of our application, an old collection account came up and causght me off guard (an apartment I had not lived in for over 4 years). The loan officer told me that because I had been paying my bills on time and had not had anything else go in to collections, that this should not be a problem. Well, it turned out to be the make it or break it point on my report and we decided to hold off on the mortgage and house till we were able to clear up this collection item.
I guess the problems that I have are 1) I have a collection item that caught me off guard. I had never been contacted by the company about this deliquent account, and it took them 4 years to notify me (via credit report) that I had an outstanding balance. 2) I have fair credit scores, have not made any late payments (last late payment was 4 years 9 months ago), and recently been paying off our CC's to reduce their balances. 3) We decided to not go for the house, but applied for an apartment instead and got that with no security deposit... What is up with that???
My husband has similar scores to mine, and the main factor on his credit report that hurt us was the balances were to high, wich inspired us to pay off our debts at an faster rate... We have closed 4 accounts and are working towards $0 balance by end of 2008 (we have about 10K in debt)
What can we do?
Equifax - 653
Experian - 664
Starting Score: 588 Current Score: 614 Goal Score: 625
I will let those more experienced with COs advise you on what to do with it. I would imagine it will involve sending a DV to the OC, then offering a PFD. I believe you'll need to know the DOFD, DOLA, and SOL for these...
As far as your cards go, paying them down is a great thing; closing them may not be such a good thing...