Understanding FICO® Scoring

[WillF360]

Hey guys, wife & I are looking at a mortgage, USDA loan.  My fako scores are in the low 600s, so I know that we "aren't there yet".  I know generally there is no correlation between fico and fako scores, the last TU FICO that was pulled, I was a 603 Beacon.  

I have the following amounts in Medical/Collections

Medical

1. $575 Collection
2. $312 Collection
3. $123 Collection
4. $429 Collection
5. $16 Collection

Other

1. Paypal/GE Money Collection $299

They are all recently reported, within the last year, most occurred either in 2010 or 2011, but still reporting. 

Other than these items, I have had maybe 2 30 day late pays in 2008, and 1 90 day, but everything else is current and pays as agreed. 

Will removing the above items via just paying the CA's help my score or hurt?  It's better showing "Paid/Paid in full" vs Collection-Upaid, right? 

Oh, other than student loans, I have one revolving credit card with a $0 or $20 balance monthly, so my usage is low. 

Thanks for all of your insights!

[DRE123]

You need to do either pay for delete or paid in full letter... I recently paid off a 4 year old CO and because It was an agreement they put paid in full, my score jumped 10 points. Will all collections also, do either letter and be sure u get there response on paper incase u need to dispute. Good luck

[WillF360]

In this case, I mean, I'm willing to pay. Would it be easiest to call them, or deal with folks through Certified mail?  I just want it taken care of as quickly as possible.  Thanks once again.  

[guiness56]

You can call them and ask if they will do a PFD.  If they agree ask for it in writing.  If they say they can't do that but will delete, it is a chance you would have to take.  Oral agreements can be just as binding.

[WillF360]

Thank you for the response.  One final question hopefully, I just did the MyFico.com Scorewatch, and also pulled a TransUnion score. 

Will pulling the score from MyFico affect my score, or show up as an inquiry?  I don't think it will, but want to ensure.  

There's no way to get an Experian Fico score, is there?  My TransUnion is a 645, which is "doable" for a mortgage I guess, Equifax, is my low score.  If I can get my Experian, I can see if I can qualify.  I hate to put in anywhere until I'm "there", you know? I love this process,ha.

[foofighter74]

Pulling your own scores, or monitoring your own credit will not impact the scores themselves.  These are soft inquiries.  As for Experian, you can't buy a FICO score. There are some FAKO scores based on experian data I believe...but they aren't worth much.

[RobertEG]

The answer to "should I pay" has two separate aspects.

Just paying wont improve FICO score, as you dont pay off the derogs, you pay off the debt.

However, credit approval goes beyond a three-digit number.  Presence of unpaid, delinquent debt can be a show-stopper regardless of FICO score.

Waiting for credit report exclusion of derogs shields them from easy view by simply pulling a credit report, but does not erase its condinued presence.

The presence of unpaid, delinquent debt always carries risk in future quest for credit.

[WillF360]

Thanks RobertEG, I appreciate it.  I'm definitely not "against" paying them off.  In fact I want to pay them off.  I owe it. 

On the same token, if it will prohibit me from obtaining a mortgage in the short term, do I risk it?  I just did the 5/3 Identity alert custom scenario, of having all of those "deleted", and it increased my score drastically.  I know the score isn't the end all, be all.  I want the debt gone.  I also want my family to be in a home vs renting. 

Thanks for your reply!