Sigh..I need to settle...

[AshCas]

We'll be applying for a mortgage in May and although my scores are now in the low 700's - I really wanted to have all the baddies off my credit report. The only thing left is a collection from Asset Acceptance for $750. They're reporting the status as of 2/2012. I've read sometimes paying off an old collection will drop my score - but since it's basically updating every month, is there any harm in settling? They've been tacking on interest fees every month.. Would it be better to call or send a letter? All I really want is a $0 balance reported.

[Repo-ed]

I would try a PFD, first.

[AshCas]

From everything I've read, Asset doesn't PFD.

[rckstrscott]

---

@AshCas wrote:
We'll be applying for a mortgage in May and although my scores are now in the low 700's - I really wanted to have all the baddies off my credit report. The only thing left is a collection from Asset Acceptance for $750. They're reporting the status as of 2/2012. I've read sometimes paying off an old collection will drop my score - but since it's basically updating every month, is there any harm in settling? They've been tacking on interest fees every month.. Would it be better to call or send a letter? All I really want is a $0 balance reported.

---

You will need a letter of explanation for any bad account, to explain the DOLA, however, if this account is older than one year, once you pay it to $0 balance you will have no issues qualifying for the mortgage.

Updating monthly will do nothing for your score if it is correctly listed as a collection, FICO score model does not include the DOLA on collection accounts. Paying it to 0 should not result in any score movement.

-scott

[AshCas]

The collection is from 2008, so way over a year! Thanks for the info Scott - it helps a lot! Will I still need a letter of explanation for the bad account if it's that old? What's the best way to contact Asset?

[rckstrscott]

---

@AshCas wrote:
The collection is from 2008, so way over a year! Thanks for the info Scott - it helps a lot! Will I still need a letter of explanation for the bad account if it's that old? What's the best way to contact Asset?

---

The letter of explanation is something YOU create, not the creditor.. your loan officer will explain it when you actually apply, but essentially its just a simple letter explaining what it is, why the account went into collections, when you paid and what you are doing in the future to avoid these kinds of situations.. 

Every negative entry, no matter how old, will require this.. I preapproved with a score 722, with 4 paid negative items, all from 2008!

good luck!

-scott

[GoodCredBen]

Asset Acceptance accepted my PFD offer.... lol

Might be a little old fashioned but i sent them a money order for what i owed (like 95$) and on the bottom i wrote, By cashing this money order, you accept to delete this trade lines from all 3 major credit reporting agencies...

not bu 3 or 4 days later, i get a piece of mail saying they have removed from the CRA lol.....

*Take photo copies of everything you send them. 

[AshCas]

Really?! This is the first I've heard of them accepting one!! When did you send them the money order?

[GoodCredBen]

Like 1 1/2 years ago? let me see if i have their contact info still. 

[GoodCredBen]

Nope, no contact info here at work, sorry!