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need advice!!. to pay or not to pay CO

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Anonymous
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need advice!!. to pay or not to pay CO

I have two collections that  have been verified, will not accept PFD, and they both are within SOL

my LO said they would need to be paid before I started the fha mortagage process. So my question is will it hurt my score to do a settled amount vs paid in full. Ive read that a paid collection hurts as bad as a unpaid collection so if its not going to help score it would be nice to at least settle and save the extra cash for down pmt. Just want to make sure it wont lower my score.

 

Please please help mortgage guys!

Message 1 of 18
17 REPLIES 17
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

2 things.  Feel free to settle them if they are not willing to PFD, it will make no score difference.

 

Paying them off will likely update your DOLA and cause a drop in FICO score though.

 

The best bet is to talk to the LO and see if they are willing to pay the collections at close that way if there is a credit dip, it will be after you have closed the loan.  Almost all banks will do that as long as they see you have the cash to do so (and they should not care if it is paid in full or settled)...

 

 

Message 2 of 18
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

thanks mickie08 I'll ask the LO. When i did the simulator on Myfico it said my score would go up if i paid 90-100%, are the simulator pretty acurate or should i ignore it?

 

also I was wondering if lenders use a different fico version thats on myfico because my equifax (LO said they used equifax for credit card i was changing from secured to unsecured) on here is 612 and a LO(I know there not suppose to say but I ask her my score) and she said its higher than 612 its actually 20 pt higher? Why is there a difference?

Message 3 of 18
haulingthescoreup
Moderator Emerita

Re: need advice!!. to pay or not to pay CO

Collections are scored off the date of assignment, not the DOLA. A change in DOLA shouldn't affect the score.

 

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

 

Here's a thread discussing this: Settle or Pay in Full?

 

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 18
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

im glad you mentioned that because just on my equifax the collection shows up under an open account thats 120 days late?

Message 5 of 18
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

can a collection show as an account and 120 days late? and it posts as currently past due even though its 4 years old. Is there anyway of disputing based on them reporting incorrectly. Also can they keep adding interest?

Message 6 of 18
JM-AM
Valued Contributor

Re: need advice!!. to pay or not to pay CO

Both the OC and CA can report. 

Good Luck
May all your dreams and wishes become a reality!
Message 7 of 18
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

can a collection report as an open account i thought it would have to be under a collection? and how can they report it as an open installment 1 month term?

Message 8 of 18
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

BUMP

Message 9 of 18
Anonymous
Not applicable

Re: need advice!!. to pay or not to pay CO

If it wont hurt my score id rather settle it before and not have any hold ups. haulingthescoreup how do i get a collection to correct that they are reporting as a open installment 120 days late when it should be under collections? and because they updated it when i requested it to be validated it looks like a recent past due account? is there anything i can do?

Message 10 of 18
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