Help needed for baddie prior to applying for construction loan.

[raine22]

Hi,

I will be applying for an fha home construction mortgage in July 2010.  There are a couple of issues that I'd like to get cleaned up on my credit report in order to raise my score before I apply.  I'm not sure how to proceed or if I should just leave it alone in case of making it do more harm than good.

Equifax - current fico score 673

Shown under Credit Accounts - Palisades (Verizon North-Landline)  $276.00 paid in full. (has been paid for a couple of years)

Status as of 4/2010

Date opened 8/2006

Date last activity  2/2004

Balance 0

Account type  Open Account

Over under current status it shows:  120 + days past due - 30 days: 0  60 days: 0   90 days: 0

Consumer disputes after resolution  (disputed in past)

Experian - current fico: no idea - shows as a collection account

Palisades Collection - Verizon North (Landline)

Date opened  8/2006

Date of status  8/2008

Type:  installment 1 month

Status:  Paid, Closed

Status Details:  This item was verified and updated on Aug 2008

I would really like to get this off of my credit report, it's being reported wrong and has been paid for a couple of years.  Also, it is not 120+ days past due.  The one thing I don't' want to do is make it worse since it seems that Palisades reports this as verified on a monthly basis,, computer generated I'm sure.  I went through the steps of trying to have it all corrected without any luck a couple of years ago.  Hence, consumer disputes after resolution on Equifax report.

Any suggestions on how I should handle this derog on my credit file.  I am worried that the 120+ days past due is still hurting my fico scores even though it has been paid for at least two years.

Thanks!!

[guiness56]

These are both paid so your only option is sending GW letters.  As for the 120 days late, that is your worst delinquency.  It does not hurt your score, the collection does.

[raine22]

Thank you for answering.

I assumed by it saying under current status 120+ days past due is still affecting me even though it was a few years old. 

I will try sending Palisades a GW letter and see if I have any success or am I better to send it to the OC?

[Anonymous]

Hi Raine,

If it is palisades that is reporting the 120 late then I would write the GW to them. 

Have you been in any discussions with the lender for your construction loan?  My DH and I closed on our new construction home in December 09.  Even before I applied with my bank I spoke with the loan officer several times just to find out their requirments and told her where we stood score and history wise.    I would suggest if you haven't already to speak with them.  If your scores are in the upper 600's and your applying FHA, in my opinion that paid collection account is not really going to make a difference.   Just my opinion, for whatever that's worth

[raine22]

Thanks for the opinion love2golf.

I have spoken to the LO as far as what is required as far as fico score etc.  We have land equity towards our downpayment and my TU and Equifax fico scores are above the 680 requirement for the fha construction loan.  I just thought possibly if I had it corrected it would raise my scores and I have no idea what my Experian score is.  I did not mention to the LO about the paid collection on the account.  I thought it might be possible to have it corrected before applying not to show 120 days past due even though it is paid.

I will talk to the LO and see what she says :-)  Thanks for the advice.

Congrats on your new home!