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Good afternoon,
My girlfriend is in the process of buying the house that she's currently renting. She has a relatively limited credit history because she has always remained debt free, with the exception of one auto loan that was paid off years ago with no late payments, and a couple of student loans that are in deferrment while she's in school. A review of her credit reports revealed a medical collection for only $75 that she wasn't aware of. After looking into it, it was a deductible from when she saw a doctor back in Sept 2014. We've called the medical center and the collection agency, and either will agree to a PFD -- they just say that it will show PIF. What's the best course of action to take? She's planning on going through NFCU for the mortgage. Should she just let a loan officer pull the credit and advise her? Or pay the collection then have them pull it? Thanks in advance.
FICO 8 as of 11/4/17: EQ 674, TU 679, EX 665 | Gardening commenced Friday the 13th (10/13/17) | Next app: Oct '18 - 2nd AMEX
Treatment of medical collections varies widely when applying for a mortgage, dependent upon the underwriting criteria for the loan.
Some may require payment of any unpaid, delinquent debt, while others may treat medical collections only as part of your debt to income ratio calculation, and not require their payment.
I would advise an initial consulttation with your intended lendor to determine how payment of the delinquent medical debt will be treated and whether payment is mandatory.
I'd let the mortgage officer pull her credit and discuss what to do based on the bank's underwriting standards.
Her having little credit history might be a problem, though. Does she know her FICO scores?
Sorry for the delayed response. Scores as of today are: EQ 698, TU 701, EX 651. The collection is only reporting to EQ. I actually spoke with the collection agency the other day. They agreed to a PFD, and it was only $75. Worth the gamble... needed to get paid either way. Said it would be deleted and they report the 15th of every month. I'll find out next Monday or Tuesday if they really did delete it.
She has student loans that are in deferrment while she's in school. One auto loan that was paid off August 2008 with no derogatory payments. I added her to my C1 account as an authorized user since it's 10 years old.
Not sure why EX is 651, EQ is 698, but the collection is reporting to EQ, not EX. But that's a question for another forum. Hah.
FICO 8 as of 11/4/17: EQ 674, TU 679, EX 665 | Gardening commenced Friday the 13th (10/13/17) | Next app: Oct '18 - 2nd AMEX
FICO 8 as of 11/4/17: EQ 674, TU 679, EX 665 | Gardening commenced Friday the 13th (10/13/17) | Next app: Oct '18 - 2nd AMEX