Old Collections reporting every month will they prevent a mortgage approval?

[delta98]

I want to buy a home in Florida. I have adequet income but little cash so down payment will be 5%. My credit report is good for the last 4 years however I had some serious issues in 2008-2010  I have 3 collections that are from 2009-2010  all 3 are past SOL but the compaines report them every month in an effort to get me to pay them. I would pay them but I am afraid the  current paid collection will be worse than the old unpaid collection for my credit scores.  All 3 total less than $2000. What is the best way to handle this?

Thank you all for your help.

[sports1965]

Are they medical collections? 

[delta98]

no, credit cards

[Anonymous]

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@delta98 wrote:

I want to buy a home in Florida. I have adequet income but little cash so down payment will be 5%. My credit report is good for the last 4 years however I had some serious issues in 2008-2010  I have 3 collections that are from 2009-2010  all 3 are past SOL but the compaines report them every month in an effort to get me to pay them. I would pay them but I am afraid the  current paid collection will be worse than the old unpaid collection for my credit scores.  All 3 total less than $2000. What is the best way to handle this?

Thank you all for your help.

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Since they report every month paying them won't affect your score. The reason people caution against paying old debt is because the Date of Last Action is updated. Since they are updating every month anyway it shouldn't be affected.  You will have to write letters of explanation for these paid or unpaid. It's best to try to PFD so you can have them removed and not have to explain it and it will help your score.

[delta98]

Thank  you for responding so quickly.  So  these because  3 collections from 2008-2009  are past the SOL but are still updating monthly , if I pay them in full it will not hurt my FICO score. It would be best if I can get them to do a PFD but if that is not possible (one of them is Portfolio Recovery and I understand they are difficult to deal with) then paying them off and having a letter of explanation will still allow for a mortgage approval if everything else is ok on my reports, correct?

I have 4 open revolving accounts that are all current with low utilization, 2 car loans with no lates in the last 3 years, one of them is almost paid off just 4 months left and my student loans which are also current, income for 2014 110k and will be at least as much this year.  So really the only issue is the 3 collection accounts. 

Thanks again for your help

[Peter1142]

I do not think collections are allowed to report every month. I think you can dispute this. Ask on the rebuilding forum.

[delta98]

interesting.... I will ask about this

[Anonymous]

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@Peter1142 wrote:

I do not think collections are allowed to report every month. I think you can dispute this. Ask on the rebuilding forum.

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They can report anytime they want. Hard pull your reports. As well as a multitude of other things.

[Peter1142]

I am fairly certain they can't report you as late this month when the account was sent to collections 5 years ago. I do believe that kind of date refreshing is illegal.

[Peter1142]

But I am no expert on collections reporting. Perhaps it depends in how it is being reported.