Two Year Old Collections - Pay or Nay

[Anonymous]

Hi All,

I've scoured this thread and have read so many differing scenarios...my head is spinning. 

Hope that this is the correct forum for this question. 

Getting ready to apply for a 30 yr conventional mortgage loan and have been obsessively attempting to get scores up. 

I am subscribed to the FICO Ultimate Monthly and as best I can tell- my mortgage scores have not changed since August...yet all others have increased 50+ points.

Here's a Snapshot:

- Mortgage scores: EQ 632, TR 668, EX 712
- All CCs paid down to $0 with the exception of 1 CC which has utilization below 8.9%

- Credit mix is excellent
- Credit age is excellent
- 60 day auto lease late from Feb. of this year - has been current since March
- 30 day mortgage late from March of this year - has been current since April

- three 120 day late education loans from 2013 - all have been consolidated/sold and have been current since end of 2013
- one Medical collection, 2 yrs old for $60, Status - Unpaid/Collections - Equifax is the only CRA reporting this

Would it help if I paid the $60 collection?  And if so, is it worth it if they will not delete.  
Will gladly provide more info, if necessary.

Thank you very much!

[DollyLama]

Since your current middle score is around 36 pts higher, and will be the one they would use. I doubt that it will make EQ cross a higher threshold to be a middle score. 

Things to consider, is the collection reporting a status date each and every month? Or has it not updated the status for several months or a year or more? If the latter, a new update on the collection with reporting of 01/2019 could actually cause the score to drop. 

On the other hand, if it is being reported month after month, Sept, Oct, Nov, Dec, I would google the collection company and pay for delete, see if they are easy collectors who will do a pay for delete. If not, wait till your loan officer advises. 

[Anonymous]

HI DollyLama,

Thanks for your great response.

I'm not totally sure if it is reporting status date.
It shows the same info every month.  Does not state lender's name.  The date assigned always stays the same.
Here is a copy/paste of how it reads:

ACCOUNT NUMBER

XXXXXX

ORIGINAL LENDER

–

AGENCY NAME

613YC00000

DATE ASSIGNED

08/31/2015

ORIGINAL BALANCE

$60

CURRENT BALANCE

$60

RESPONSIBILITY

Individual

STATUS

Unpaid

COMMENTS

Medical

What do you think?

[me12345]

  DO NOT PAY IT OFF....

Was that subtle enough?

Medicial collection are not required to be paid off, paying off a 2 year old collection could back fire and lower your score....

a better option if you think that it is affecting your score, would be to dispute it, that prevents it from having a negitive impact on your score.

(you can only do this with medicial collections, other dispuites must be removed in most instaces)

As far as collections in genreal go, you should  ALWAYS talk to your LO first before paying anything off, or down if you are looking to get a mortgage.

Thanks,

[NC_Mtg_Loaner]

^ Now here's where I don't understand why you wouldn't pay off a two year old $60 medical collection---especially if it's valid.

I mean, you are likely to be handcuffed with the recent mortgage late (You really don't want to apply for a mortgage loan with a mortgage late within the last 12 months I don't think; do you?) so why not go ahead and get that medical collection to show Paid $0 balance even if they won't simply delete it?

You have enough other good things going on that will help to quickly rejuvenate that score later this Spring, right?

[me12345]

If your goal is to raise your scores to get a loan, then paying off an old collection can be counterproductive to increasing your scores... I'm not saying skip out on your debts...I'm just saying pay it off AFTER you get your loan.

and of course the time frame involved has to be considered, if you are looking at applying next year vs. next month, that would change the context of what your immediate goals are.

Thanks,

[Anonymous]

Thanks for your help!
The item actually is NOT valid.  Have been able to get it deleted from all other CRAs but not from EXP.
Will just let it be until we have completed our loan process.

Happy Holidays!!

[VALoanMaster]

Hi Shar037,

One way you can try to boost your scores is to request a one time courtesy delete for the 30 day late payment on the mortgage & on the lease.

[Anonymous]

"One way you can try to boost your scores is to request a one time courtesy delete for the 30 day late payment on the mortgage & on the lease."

Thanks VALoanmaster!
We have only had this one mortgage late.
So, yes, I thought about asking for a delete.  But have heard that outcomes vary.
Any idea if U.S.Bank (mortgage) will even consider doing this?

[spiritcraft1]

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@Anonymous wrote:

Thanks for your help!
The item actually is NOT valid.  Have been able to get it deleted from all other CRAs but not from EXP.
Will just let it be until we have completed our loan process.

Happy Holidays!!

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Did you try the HIPPA process?  Google it.  I am doing that now for an invalid medical collection on TU.