Applying for FHA mortgage soon, what to do with these bad accounts?

Anonymous — Sat, 04 Jul 2009 16:00:42 GMT

I will be applying for a mortgage soon. Have a good paying career job, and I have brought my scores up considerably, however, my mid score being a 631, it's close to the fha line of 620. I have these two accounts that I could immediately pay off in full. However, I don't know if I should pay them for fear it will decrease my score. Let me state beforehand, I have already dv'd, they are mine. They were both denied PFD twice. I also have no other lates in the past 15 months. What should I do with them?

This below account is only listed on my Transunion report, under the collections section. It is red flagged as hurting my score. Should I pay it now or leave it be?

Collection on debt to: Dollar Thrifty Auto Group

The collection agency "Jnr Adjustme" was hired to collect a debt of $569 originally owed to "Dollar Thrifty Auto Group" on account number "XXX7145".

Collection agency [?] Jnr Adjustme Original balance [?] $569 Current balance [?] $569 Status [?] Not Reported Date assigned [?] Mar 30, 2007 Date reported [?] Nov 01, 2008 Date last active [?] Not Reported Date paid [?] Not Reported Date closed [?] Not Reported Original lender [?] Dollar Thrifty Auto Group Account number [?] XXX7145 Type of account [?] Not Reported Account holder [?] Individual Type of credit [?] Not Reported Payment status [?] Not Reported Largest past balance [?] Not Reported Amount past due [?] Not Reported Account descriptions [?] Not Reported

This account is no longer owned by HSBC. It is charged off, and a CA owns the account, and it is being reported in my accounts section in both TU and EQ as a bad debt/collection. However it is not being counted in to my utility. It has been dv'd, and offered a PFD, both denied. Since it's reported under accounts, will paying it increase my score? Should I pay it at all before applying for FHA, or just leave it alone?

Hsbc Bank

Status as of [?] Apr, 2009 Date opened [?] Aug, 2006 Date of last activity [?] Mar, 2007 Date closed [?] Not Reported Account number [?] Not Reported Loan type [?] Not Reported Largest past balance [?] $527 Terms [?] Not Reported Account Type [?] Revolving Account holder [?] Individual Scheduled payment amount [?] $0

Descriptions [?]

Consumer disputes after resolution
Account transferred or sold

Thanks for your help.

Re: Applying for FHA mortgage soon, what to do with these bad accounts?

Anonymous — Sat, 04 Jul 2009 18:41:07 GMT

I'd leave it alone. The mortgage experts here often say collections will appear the same to a lender regardless of whether or not they're paid (with few exceptions such as an extremely large amount). What they're really looking at is the date on the account.

Paying the old collection will often re-age it making it look like a brand new collection. That would be bad because you want at least 12 months clean history, no collections, no lates. Re-aging will most likely drop your score. It is highly unlikely paying a collection will raise your score, unless it is deleted after payment.

Also be cautious about disputing. Some people have reported being denied mortgages because they had open disputes or too many disputes.

Good luck

topic Applying for FHA mortgage soon, what to do with these bad accounts? in Rebuilding Your Credit

Applying for FHA mortgage soon, what to do with these bad accounts?

Re: Applying for FHA mortgage soon, what to do with these bad accounts?