Old Collections

[jdnyprowsky]

My question is actually 2 parts.

1-I have an old collection on my credit report that was from a traffic ticket that is showing as "paid in full". I live in New York and the collection is over 7 years old. Should I be disputing whether or not this should be on my report and does it currently have a negative impact on my scores.

2-I am in the middle of applying for a mortgage of which I have been pre-approved to close for an approximate date of November 15th of this year which is only about 2.5 weeks away. My scores are currently just above where they need to be in order to be approved to move forward. My concern is that just this week a VERY old collection account from 8+ years ago contacted me via telephone and mail. It was a minnimal amount ($330) and I spoke with them today and settled the debt for $180. Being that I am a bit anxious about my scores dropping from now until my closing, I did not inquire whether or not this would be updated on my credit report in the coming weeks and if it would have a negative impact on my scores eventhough it has not been reported in years and I have made a settlement payment.

Thank you.

[RobertEG]

The credit report exclusion period for any collections is, under the federal FCRA, 7 years plus 180 days from one date-certain, which is the date of first delinquency on the OC accoount that is under collection.  No other dates are relevant.

NYS has a more restrictive state statute that reduces the exclusion period for paid collections to 5 years.  Advise the CRA that you are a resident of TX, and request its exclusion based on your state statute.  Time is probably a bit short to complete that exclusion process, but maybe your lendor can assist in a rapid rescore.

You do NOT want to file a formal dispute while under a mortgage app process, so treat it as a request for review by to the CRA, not a dispute of accuracy of reporting.

As for the old collection that is not yet reoorting, if more than 7 years plus 180 days has expired since the DOFD on the OC account, they can still pursue collection, but the CRA cannot include the collection in any CR they issue.

Thus, the problem with that debt is not one of it being shown in your credit report or having any potential score impact.

However, the issue with that collection is that it is an assertion that someone out there considers you to have unpaid, delinquent debt.

Your issue would be if, in the app process for the mortgage, they ask if you have any unpaid, delinquent debt.  Having passed the initial approval process and being unaware of the asserted debt when previously asked, you could choose to ignore it.  Up to you as to whether to now bring it to their atttention.  The answer to that qustion is probably kinda evident......