Need some solid advice please.

[huck1081]

I just met with my LO to have my credit run. I knew that I may not be at the 580 I need to get a pre-aproval, but she said we can run it and then use her Credit Simulator to see what I can do to get it to get to 580.

Mortgage Scores came back

EQ- 527

TU- 549

EX- 575

History is pretty bad, but has been solid for close to a year now. New revolving accounts are 2 at $0 and 1 at 3% utilization.

I have 5 derogs reporting with balances totaling $1491. They are all from 2010-2014, updating monthly and showing as past due.

The Simulator she used said that if I paid all of these to show a $0 ballance it would give me 32 pts on my TU report. I have been trying to PFD these for months with no luck on 4 of them. 1 bit today, so I paid it in full. Does this seem correct to you guys that have either had a simulator run, or use it regularly?

Also, I asked if I should pay in full or settle. She said if I settle that as long as it shows a $0 ballance it should be fine for manual underwriting.

If more info is needed please let me know.

Thanks!

[Anonymous]

Paying off collections wont really do anything for your score. It just looks better to have paid collections than outstanding ones. PFD is the only way paying old collections can help your score. Once a collection hits the report, only removing it will really bump you up. Not sure what kind of simulator was used, but those are only to be taken with a grain of salt.  You are better served opening up a new tradeline. Most people say that having at least 3 open tradelines will help rebuilding you credit.

[huck1081]

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@kokenwa wrote:

Paying off collections wont really do anything for your score. It just looks better to have paid collections than outstanding ones. PFD is the only way paying old collections can help your score. Once a collection hits the report, only removing it will really bump you up. Not sure what kind of simulator was used, but those are only to be taken with a grain of salt.  You are better served opening up a new tradeline. Most people say that having at least 3 open tradelines will help rebuilding you credit.

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That is what I was thinking also. I know the sim she used is some suped up simulator that Loan Oficers have, so I was thinking maybe it was more accurate.

Thanks for the advice also! I do currently have 3 open tradelines and 2 instalment notes. 

[frugalQ]

OP...are your baddies collections?  I've never known collections to update monthly as past due.  A collection is usually just put on your credit report and it sits there until it's either paid, settled, or deleted.

Are you sure it's not an actual account in either the revolving or installment section of your report?

[DallasLoanGuy]

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@kokenwa wrote:

Paying off collections wont really do anything for your score. It just looks better to have paid collections than outstanding ones. PFD is the only way paying old collections can help your score. Once a collection hits the report, only removing it will really bump you up. Not sure what kind of simulator was used, but those are only to be taken with a grain of salt.  You are better served opening up a new tradeline. Most people say that having at least 3 open tradelines will help rebuilding you credit.

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maybe it has to do with how it is reported.... like: does it report a balance in the past due column?

i have had score sim suggest collection be paid and it works.

i have also had score sim say no change to pd collection.

bottom line: the score sim knows. we are all just guessing

[huck1081]

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@DallasLoanGuy wrote:

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@kokenwa wrote:

Paying off collections wont really do anything for your score. It just looks better to have paid collections than outstanding ones. PFD is the only way paying old collections can help your score. Once a collection hits the report, only removing it will really bump you up. Not sure what kind of simulator was used, but those are only to be taken with a grain of salt.  You are better served opening up a new tradeline. Most people say that having at least 3 open tradelines will help rebuilding you credit.

---

maybe it has to do with how it is reported.... like: does it report a balance in the past due column?

i have had score sim suggest collection be paid and it works.

i have also had score sim say no change to pd collection.

bottom line: the score sim knows. we are all just guessing

---

Thanks! This is good news!

They all show a past due balance, and are updating monthly. Only one is listed in the collection section of my CR. The others are listed as Other acounts.

Do you recommend paying in full or would it be okay to settle?

[djmax041]

if u can pay for delete  

its the only way your score will increase and it will increase it by alot 

contact them everyday eventually they will settle for u 60 percent minimum

ask for it in writing before agreeing to do so

[Anonymous]

I purchased a house 3 months ago and the loan officer used the score stimulator to get my score up. I had one charge off account for $588. The stimulator said my score would jump by 58 points once that was paid and showing a zero balance. Well the company discounted the account and I ended up paying $488 and once they reported zero balance my score jumped 58 points. We got the house! Try exactly what your loan officer says. Remember the company must report a zero balance and they must notify the CRA in order to see the jump. The loan officer will try to get your score updated in 3 to 5 days verses the 30 day update.