Collection Accounts- Settle or Pay in Full

[Misses_November]

Does paying in full have a better impact on your credit score then settling?  I know I have read on here before where some say it won't change your score at all.

[MarineVietVet]

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@Misses_November wrote:

Does paying in full have a better impact on your credit score then settling?  I know I have read on here before where some say it won't change your score at all.

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For scoring it doesn't matter but a lender looking at a report might look more favorably seeing a collection was paid. Plus sometimes a collection has to be paid off before a mortgage can be closed.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[Misses_November]

OK, that's exactly why I'm working on my credit, would like to get a new home within the next year.  Thank you!

[jdxprs1]

seems to me that lenders dont give a chit about anything but your score.

[Anonymous]

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@jdxprs1 wrote:

seems to me that lenders dont give a chit about anything but your score.

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If that were somehow even remotely true, this forum wouldn't be full of people who have been refused credit even though their scores were 750+.

[Anonymous]

ok, maybe i should say it this way. lenders dont give a chit about anything but your score if you are under a certain number.

[RobertEG]

I agree with O6

Most lendors DO care about a whole lot more than your FICO score.

There are many, many things that a mortgage lendor will be concerned about, other than your three-digit FICO score.

When you apply for a mortgage loan, it is not the same as applying to HSBC, for example, for a low-end credit card.

They are extending tens of thousands of dollars, not just in future credit limit, but immediate, out of the pocket,  expenditure of their funds.

So they ask for a lot more than a three digit FICO score.  Maybe income. Maybe total assets and debt, beyond what is in your CR.

An account settled for less than the debt owed is not a good thing, upon manual CR review.  It says that you did not fulfill prior debt, in full.

That is not scored by FICO, per se, but is still a factor in any future extension of credit.

[jdxprs1]

bullchit.

please show me a mortgage lender that does not have a minimum credit score you must meet before they will work with you.

[Anonymous]

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@jdxprs1 wrote:

bullchit.

please show me a mortgage lender that does not have a minimum credit score you must meet before they will work with you.

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You must be confused, amongst other things.

#1.  This thread is not about a mortgage.  It's about a collection account which usually signifies open-ended credit or a simple debt.

#2.  Your credit score can <800, but if you have public records or unpaid collections no mortgage underwriter will touch you until they are taken care of.

I know it is difficult to accept the fact that you are wrong, but please learn how to do so gracefully.

[fused]

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