LOOKING TO BE 1ST TIME HOMEBUYER/NEED ADVICE ON COLLECTIONS

[tray]

Hi, everyone I have 3 collections on my credit report unpaid, 1 utility, one collection from a credit-card co, and one old cell phone bill should I pay these collections off now, I hear credit scores tank when this is done, but I am afraid the utility collection will be sold to a collection agency and my other collection every month increases by $5.00.  Any advice what should I do.  Thank you ( total amount a little over $2,000 to pay off in full)

Credit Scores

TU-723

EQ-689

EX-694 last but must be higher now

[Anonymous]

How old are the collections? If they're old sometimes it's best to leave them alone and let them fall off your CR. Paying them can also re-age the accounts which could prevent you from getting a mortgage for 12 months or more. LO's usually will tell you what needs to be paid.

If you do end up paying them make sure to ask them to delete the account from your report as part of the payment. 

[Anonymous]

If your loan officer wants them paid ask him to arrange for them to be paid at closing. That way you won't tank your score by reaging them when you pay them.

[Anonymous]

But if the OP has collections that are adding $5.00 every month to the balance isn't it already updating or reaging it?? I have a old collection that was adding $1.00 every week and I made arrangements a while back and to my amazement when I paid the first 1/4 of it - my score went up 10 pts with no other changes to my CR. I think they have it listed as a account instead of a collection but I am not going to complain.

[nmorton79]

I've had 3 lenders tell me 3 different things.  Lender A told me that any collection over $1000 had to be at least in repayment for 1 year, Lender B told me that what ever baddies I had on my credit reports had to be paid yo $0 balance at the time of app, and Lender C told me that collections that have been re aged with in the last 12 months had to be paid to $0, but if you had a collection that has not been updated within the last 12(and from the way she made it seem, it didn't matter how big or small the amount due was)it would not be a factor for them, so...it realy depends on the lender.

Good Luck!

[Anonymous]

If those are FICO scores and you're going FHA then they are plenty high and you could leave the collections be.  I'm assuming they're old since if they were recent they should be hurting your score more.  If you want to get rid of them, please check with the Rebuilding board first because there are good ways and bad ways to handle these buggers.