New Member
Posts: 6
Registered: ‎08-20-2011
Re: 120 late or paid collection - which is better?



I have your answer for you! I just applied for a pre-approval on a mortgage. You said you are trying to get your score up a few points. If you will be applying for a mortgage, DO NOT change it to a collection. According to my lender, FICO calculations for mortgages work differently than any other loan. Your FICO scores will go down if you report a collection instead of just a 120 day late. On the TU, for the mortgage FICO, it recalculated my husband's once decent 724 to a 698. This became his lowest score. So, something to seriously consider is what you are trying to get the extra points for. If it is for a mortgage, know that the expected outcome is that a collection is received worse than a simple missed payment. For other loans, it may be different. I won't know until the dispute is fully processed how it affects the overall FICO. Hope this helps!