I think I'm really going to apply now

[JGWantsAHouse]

Equifax:653, Transunion:642, Experian:?

I've been postponing applying for a mortgage loan for many months. I've saved some money, the rates are low, my scores aren't really budging so I figure I should just go ahead and apply.

My plan is to go to open a savings account at the credit union that offers the downpayment assistance program that I want to participate in, while I'm there I will ask the loan officer a few questions.

In mean time I'm paying off a collection that I've sent many PFDs with no success.  The last response I received from them was that they are willing to update my account to "paid in full" . It sucks, but since the collection was opened 01/2010 I believe that I should pay it before I apply. The collection is only reported on Transunion, I do not have any other collections reported to other bureaus.

I plan to apply around the beginning of November.

If anyone has any advice before I take the plunge, please advise. I'm particularly interested in any reactions to me paying off a collection without a pfd, and any questions I shoulld ask the loan officer.

[IOBA]

1.  Pay off the collection asap!

2.  Be aware that when you open the new account up, they will pull credit.  Ask if that credit report can also be used for a mortgage application.

3.  Go for it!

[incognitony]

Some say don't pay off collections unless the loan people ask you to because it could hurt your score or they don't require it.  All the LO's we dealt with wanted the non-medical collections paid before closing.

[JGWantsAHouse]

Thanks! I didn't even think about the fact they will pull my credit when I open the account. That should be a great indicator of what they think of my report...

[jasimae]

Your credit is not necessarily pulled when you open up an account at a credit union.  Mine wasn't when I opened my account at my local credit union.  If this is their practice then it is, but if it isn't then it isn't.

[Anonymous]

USDA nor did my current FHA LO ask me to pay off my 2005 collection.  My LO said I would just have to write a letter of explanation.  I would wait to see if your LO wants you to pay it off or not.

[JGWantsAHouse]

I was conflicted about that but my collection is under 2 years old.  Its only $175 so I figured I wouldn't hurt to pay it since I had always intended to. I was thinking maybe a GW letter along with the payment may produce a different result.

[sassymomof2]

Don't pay the collection yet. When it updates it can sink your credit score. I lost 40 some points from my TU when I paid a CO acct in July. Wait for your LO direction.

[JGWantsAHouse]

Yes, I'm afraid that might happen but I've read alot about it the last year and a half and some people lost points, others didn't.  It only reports to Transunion which I'm guessing is my lowest score because my Equifax and Experian reports look alot better than Transunion. 

I sent a goodwill along with payment, maybe they will delete it.  Oh well, I've already mailed the payment so we will see soon exactly what happens.   I'll keep everyone updated on exactly what happens.

[JGWantsAHouse]

I was getting ready to go open an account with the bank I want to use and I got an alert from Equifax that a new collection account was added. Bummer...This is the first time this has happened in years! The DOLA say 7/2005 but I have no idea what account its for. I don't have a dunning letter yet. I'm going to start another thread to get some advice about this company.