personal loan for collections?

[hoff33]

We have some medical collections from 2010. About 19k total :-/ in about 15 different accounts. I have made monthly payments to keep them from filling a judgment.

We may have the option for a personal loan through our credit union. Spoke with the person who handles my accounts at the CA. She said if we pay a lump sum (close to the total) they will delete ALL accounts from our credit report.

Is It worth it? We are trying to be approved for a home loan and I would hope these being removed would give me a good boost. What do you think?

Our DTI is very low so this installment loan would not hurt our chances with a home loan in the future.

If it would not increase my score much then I'll just leave them alone. The CA updates the status on these accounts about every 6 months so they seem newer on our credit report. Wwyd?

[StartingOver10]

What are your scores and how long have you been paying on the medical collections?

[hoff33]

My scores are EQ 547 EX 612 TU 617 (all from here) husband's from our lenders pull is EQ 688 EX 626 TU 625. Have been paying on them since 2011 but only $50 month.

[hoff33]

Also if the credit union would approve the loan amount and also add our truck loan (6k) which we pay $350 a month on the math makes sense.

[Whitneyy]

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@hoff33 wrote:
My scores are EQ 547 EX 612 TU 617 (all from here) husband's from our lenders pull is EQ 688 EX 626 TU 625. Have been paying on them since 2011 but only $50 month.

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I would do it only because paying it $50 a month would take forever to pay off and I'm sure you want it over and done with. Also I think that it's good that they will delete the collections because it will cause your score to go up. Personally, I say go for it. 

[hoff33]

Any idea what kind of score boost I could expect? Only baddies I have. I know you can't give a for sure number. But maybe 5 points per account?

[Whitneyy]

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@hoff33 wrote:
Any idea what kind of score boost I could expect? Only baddies I have. I know you can't give a for sure number. But maybe 5 points per account?

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So you'll be collection free if this happens? Plus the new tradeline because of the loan? 

[hoff33]

Correct. No other collections at all!

Also I just got all my statements from the CA in the mail today. Total is 14k without the interest. That is what I should offer correct?

[Whitneyy]

I'm not sure how much your score will go up, I had a collection come off and I gained 30 points before. So it depends, I see a big jump but you know with the new tradeline you would lose points that will come back anyway. 

Also, can't you offer them a settlement for deletion? 

[hoff33]

I can offer a settlement. She was very nice, has been for years honestly. She made it seem as long as I offer close to principal they will accept and delete. Now that I know principal is 14k not 19k it seems a lot more do able. Should I offer less then 14k? She will also send a letter stating they will delete before I pay this lump sum. They have always done what they say they are going to do in the past. I think I am pretty lucky to have them as a CA holding my accounts. They are local and could have sued me years ago. They know we are trying to buy a house and even offered to send a letter to the lender showing we have made monthly payments an are not going to sue or try to disrupt the loan.