Collection during underwriting

[Anonymous]

My middle score is already on the line 645 when they want 640. I got a new collection added to my report. Its on my already lowest score so it should not affect my middle score. Its a 200 debt that's six years old. Should I tell my loan officer? Try to pay it? They did say they will pull a new report before closing.

[CreditInspired]

Hi OP,

I think you should let your LO know ASAP so there are no surprises for her/him. Don't pay it unless your LO tell you otherwise.

[pipeguy]

Welcome to the Forum - debt collectors tend to monitor mortgage applications using your name, SSN, etc and reports provided by the CRA's since they know an unpaid debt or collection can sink a mortgage application - it's added pressure to settle up. I'm not sure a 6-year-old $200 debt will sink your application, but I suspect your loan officer will request or at least suggest you take care of it. Since the debt collector is expecting your call - that's why the collection account popped up on your report - I suggest you offer a pay for delete for no more than the original debt (50% would be better) and you'll recover any scoring you lost in addition to making your L.O happy. 

[Anonymous]

Wait, what? Collection agencies can monitor your credit report and know when you're applying for a mortgage?  How is that legal?  How can they pull your report without your permission.  Man that sounds shady but I bet it's an effective tactic

[homeloanexpert]

Stop and do nothing until you tell your LO. Don't even call the collection company until you have spoken to your LO.