We have a collection from a third party agency showing on our credit. The original debt was from 2007 and it's never showed on our report until three months ago. The third party collection agency put it on there and put the date as July 2012. We've disputed this and they won't change the dates. It's a small amount - $300 but they will not agree to a pay for delete.
I really want to try to get a mortgage ASAP. Some people have told me that paying an old collection could make my score go down further (but so did removing the dispute, which kicked us out of the running for an FHA mortgage.)
Here is my question.
Is it better to:
A. leave it as is.
B. settle the debt for less than owed and have them update my report.
C. pay the debt in full and have them update my report.
Keep in mind my goal is to get my scores up so I'll qualify for a mortgage.
