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OLD DEBT

Established Member

OLD DEBT

Last week, I started the home prequalification process. My lender ran my credit and my scores are decent (665,693,694).The problem I face is 1 of my reports (Equifax) has an old debt of $4,536 which is due to expire in January still listed. My lender wants me to settle the debt before closing. My question, is will settling reset the clock on the debt. Also, how much should I offer to the collection company that now owns the debt?

 

Although, I could wait until the debt falls off I really want to take advantage of the no down payment program I may be qualified for, as well as, the good interest rates which I am not sure will last much longer. Any advice would be appericate. PLEASE HELP!

8 REPLIES
Valued Contributor

Re: OLD DEBT

You can request early exclusion if it's that close to the expiration. Contact whichever of the 3 CRA's it's with make sure you speak to a supervisor because a CSR won't know what you're talking about. You should be good to get it removed via this process and save a few thousand. Good luck!
Community Leader
Epic Contributor

Re: OLD DEBT

The debt does not "expire" based either on expiration of the SOL or credit report exclusion.

It remains as legitimate debt until discharged, either by its payment, BK, or cancellation by the creditor.

 

Expiration of SOL removes the ability of the creditor to obtain a court judgment ordering its payment, and permitting attachment of assets or garnishment.

Credit report exclusion shields knowledge of the delinquent debt by excluding it from credit reports issued by a CRA.

 

Payment of the debt, either in full or by settlement for less, does not affect the credit report exclusion period of any derogs reported by a creditor or debt collector.

Exclusion of monthly delinquencies, charge-offs, and collections are based only on the date of delinquency or the DOFD.

Regular Contributor

Re: OLD DEBT


Ficochaser50 wrote:

Last week, I started the home prequalification process. My lender ran my credit and my scores are decent (665,693,694).The problem I face is 1 of my reports (Equifax) has an old debt of $4,536 which is due to expire in January still listed. My lender wants me to settle the debt before closing. My question, is will settling reset the clock on the debt. Also, how much should I offer to the collection company that now owns the debt?

 

Although, I could wait until the debt falls off I really want to take advantage of the no down payment program I may be qualified for, as well as, the good interest rates which I am not sure will last much longer. Any advice would be appericate. PLEASE HELP!


Patience Grasshoppa! I would wait until the debt falls off your CR. Chances are with the collection/derog. gone it will increase your credit score and might help you get the prequal and a better rate. The market is not going to change much in a few months so don't feel like you should rush when buying a home. GL



More grows in the garden than the gardener sows. ~Spanish Proverb
Valued Contributor

Re: OLD DEBT

A judgement is still going to be found by the title company even if it's off your CR-- you've gotta settle it or hope to wait outside the 10 yr period and that they do not renew-- a judgement does not go away at 7 yr mark like collections and charge offs. This is a court ordered event . I say call and offer a settlement to report as satisfied and this way when your public records are checked it shows satisfied and will not be a problem
Valued Contributor

Re: OLD DEBT

After reading again I'm not sure if this is a judgement! Can you clarify OP
Established Member

Re: OLD DEBT

Its a collection not a judgement. I am thinking about contacting the agency to dicuss "settling" providing they remove it from my report. Thoughts?

Valued Contributor

Re: OLD DEBT

Did you even try EE?
Highlighted
Established Member

Re: OLD DEBT

I did. Equifax the ONLY report its listed on will not budge!!!!