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Two Year Old Collections - Pay or Nay

Member

Two Year Old Collections - Pay or Nay

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!

 

 

 

 

9 REPLIES
Established Contributor

Re: Two Year Old Collections - Pay or Nay

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. 

Starting Score: 2/23/2017 Score 8 EQ 651 TU 659 EX 679
Current Score:09/23/2018 Score 8 EQ 809 TU 828 EX 810
Mortgage Scores 09/23/2018 EQ 775 TU 787 EX 783
Goal Score: 760+ ATB FICO 8-Achieved 4/2018, Middle Mortgage Score 782-Achieved 760+ 2/2018
Message 2 of 10
Member

Re: Two Year Old Collections - Pay or Nay

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?
Message 3 of 10
Frequent Contributor

Re: Two Year Old Collections - Pay or Nay

  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,

 

 

 

 

 

VA & FHA down to 550...
Licensed Senior Mortgage Loan Officer in the states of Arizona & California
Specializing in VA, FHA, USDA & Conventional loans. My company is also licensed in 12 states, Arizona, Colorado, Nevada, California, Oregon, Washington, Utah,
Alaska, New Mexico, Texas, Illinois and Florida
Message 4 of 10
Established Contributor

Re: Two Year Old Collections - Pay or Nay

^ 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?


__________________________________________________

Licensed NC Mortgage Loan Originator
Message 5 of 10
Frequent Contributor

Re: Two Year Old Collections - Pay or Nay

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,

 

VA & FHA down to 550...
Licensed Senior Mortgage Loan Officer in the states of Arizona & California
Specializing in VA, FHA, USDA & Conventional loans. My company is also licensed in 12 states, Arizona, Colorado, Nevada, California, Oregon, Washington, Utah,
Alaska, New Mexico, Texas, Illinois and Florida
Message 6 of 10
Highlighted
Member

Re: Two Year Old Collections - Pay or Nay

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!!

Message 7 of 10
Established Contributor

Re: Two Year Old Collections - Pay or Nay

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.

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 8 of 10
Member

Re: Two Year Old Collections - Pay or Nay

"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?

Message 9 of 10
Frequent Contributor

Re: Two Year Old Collections - Pay or Nay


@shar037 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!!


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

 


Rebuilding from a sudden, swift and complete credit disaster in 2014 | 2017 Starting Scores = Low 400's
Message 10 of 10