Old Debt? Please answer.....

[Anonymous]

Is it wise to pay off an old delinquent debt "before" applying for a mortgage?  The balance is 1,038.36 and I'm being offered a payoff settlement of 103.84; I want this debt GONE, but I remember reading/hearing somewhere that it is best to wait until after applying for mortgage because paying off old debt lowers your credit score.  Please help with responses.  Thanks much.

[Anonymous]

If  this debt is within your's state's SOL your lender will most likly require you to pay it off.

Talk to your mortgage lender about it.

Message Edited by Boswd on 12-11-2007 07:34 PM

[Anonymous]

Boswd,

Can you please explain futher what you mean when stating " If  this debt is within your's state's SOL"? Thank you.

[haulingthescoreup]

OK, it's incredibly important that you know what you're doing before you take any action. This is only a first step, please read this:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=8713

You actually have some leverage over the collection agency, and it's encouraging that they are offering you 10% on the debt already. Please read this also:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=2659

Please read these, and really, you should also read Credit Scoring 101. Once you do, please come back with more questions! Good luck.

[Anonymous]

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darrell wrote:

Boswd,

Can you please explain futher what you mean when stating " If  this debt is within your's state's SOL"? Thank you.

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SOL is Statute of Limitations of debt.   This is the time period of which a creditor has to be able to sue and receive a judgment of a debt.   It varies from state to state.