paying off medical debt

[sannew64]

I am trying to buy a house.  I have 3-4 medical bills in collections.  One was in the last 18 months.  I want to pay them off, but one mortgage lender said they don't affect credit, the other lender said it does and when you pay them off it will significantly drop my scores.  I want my scores to go up, not down.  HELP!

stephanie

[Mondavi]

FICO08 versions ignore CAs under $100 so if that is what one of your mortgage lenders was referring to then they could be correct. Since I do not know the amount of your medical collections I will assume they are wrong for the simple fact that I have not heard of mortgage lenders using the 08 version.

The medical that is 18 months ago is for sure hurting your score. How old are the others? If the others are old then the other lender was correct on that paying them could lower your score. Unfortunately no system is perfect and the FICO one is no exception.  So paying on an old collection could make FICO think that the collection is recent.

You have a few options. The best would be a PFD offer if you can afford it and the Creditor/CA would honor that.

You could pay it in full and then start sending goodwill letters asking for removal.

You could do the HIPPA process that takes time to do but can be affective.

If you are going for an FHA loan then your lender does have the option of ignoring collections under $1,000. If it was me I would trust the 2nd lender vs the first one.

[bettercreditguy1]

There is the posibility that your score could drop. However, most lenders will be more impressed if the accounts are paid, even if paid late. It shows responsibility.

[ktl72455]

Medical bills paid to the OC or CA are genrally easiest removed by a good will letter after they are paid.