Advice on Old Account in Collection

[Anonymous]

Hi everyone, I am needing to bring up my score to qualify for a mortgage.  No matter how good my recent credit is, my score never budges.  My credit score hovers at around 636.  I have several open credit cards (2 regular, 6 store accounts), a mortgage, a car payment, another installment loans that for the past four years have had perfect payments.  My DTI is around 10% and my credit utlization is about the same at 10%.  Still I can't budge my score.

For the bad, I have a paid lien in my public records for 2007 and I have an open collection from an account in 2006.  The judgement should never have happened as I had already negotiated a payment schedule and had all sides agreed.  However I was working with a "Debt Settlement" company and they dropped the ball with confirming the payments and it went to judgement.  Live and you learn.  I can't change this.  But the collection account, this was originally a $9000 credit card debt and is now reporting at almost $19,000.

Do I negotiate a settlement on this collection and pay it so it goes to a settled in full status?  It should roll off in 2013 but I need the mortgage this summer for a new house.  My score must be a 660 or higher. 

Any advice would help!

[Anonymous]

For the judgment, I would contact who placed it and see if they are willing to remove it.  If you explain what happened they may.

Do you know if the OC still owns the collection account, or was it sold to the CA?

It is always better to work with the OC if possible.

What is the SOL for CC debt in your state?  It may be outside of SOL.  By making arrangements you could possibly restart the SOL and be subject to a law suit.  Is anyone actively trying to collect the debt?

[Anonymous]

The judgement will stand.  The OC charged it off and a third-party attorney filed it.  Even though we had an agreement and payments were being made, my debt settlement company did not officialy sign off in time for them to not get the judgement.  The attorney will not remove it and told me to go after the DS company instead- no relief there.

As to the collection, it has been sold to a CA and they are not actively trying to recover the debt.  They are reporting date of last activity as being

However, my score will not budge.  It has been around 620 - 646 now a 637 for almost two years.  I have perfect mortgage (18-months) perfect car (18-mo, and then before that perfect for 3 years), a PIF installment loan, 2 major credit cards that have given my credit increases lately, and a host of store cards- with approximately 10% of available credit outstanding.    If this does not change your credit score with over two years of perfect credit, I feel I may be forced to pay this off.

The new loan won't even submit unless I am at a 660.  I also have a high number of credit inquiries, related to the car purchase and mortage (had to shop to get an FHA loan approved) but they are starting to roll off with 18 inquiries over 2 years.

Any additional advice?

[RobertEG]

If you pay the collection, regardless of whether you pay in full of settle for less, it wont remove the collection from your CR, and wont improve your score.

With the debt apparently past SOL and the debt collector apparently not actively collecting at this time, you may have a shot at their acceptance of a PFD offer on your part.  You offer to pay the debt in exchange for their agreement, in advance, to delete the collection from your CR upon receipt of payment.