I'm going in for pre-approval soon. My credit scores should be 720+ at the end of this month. I had a Chex Systems entry from US Bank from a few years ago that I paid in full with a Collection agency. They sent me a paid letter which I have not sent to chex systems yet, but does this hurt me when qualifying for a mortgage? I've been able to get bank accounts since then... The sum was over 1400 dollars but I don't know if it shows paid on my report or not.
You should check your report before you begin the process anyways, so you should be able to see if it is marked as paid. As others will state, sometimes paying something brings it current again, which is not good. If it is already marked paid, and your scores are still where they are, then you shouldnt have any major problems. That collection will probably be brought up at some point, but since it is older it should be pretty easy to explain and have it overlooked without to much penalty. You may want to compile some good compensating factors just in case though. A larger downpayment or a good DTI will certainly help them be a bit more forgiving.
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