Shopping for homes with Mortgage pre-approval now a new collection has popped on my credit.

[DeDe11]

Been pre-approved for 280k and shopping since December 2021. Put in many offers (sellers market for sure) but only quality for an FHA loan, credit score isn't high enough for conventional yet. I was literally points away from it and now a collection has popped up from Jefferson Capital for 1500. We've downsized, lived with family for the last year and a half to work on paying off debt and this is a major setback. Not sure what to do at this point. Tell the loan officer? Pay the debt? Does the whole pay to delete thing work? 

[Mortgage-Specialist]

For FHA loans, your credit report is only good for 120 days. I assume the lender would have to pull a new.credit - I also assume your scores dropped.

Pay for Delete's definitely work and would restore your credit to where it was prior to the collection (as if it never happened), hopefully Jefferson Capital allows it.  But if you don't have the extra $1,500 to pay it off,  hopefully your scores didn't drop too low to where it affects your approval.