Help with rebuilding scores

Anonymous · ‎05-19-2009

we fell for the FACKO scores and thought we were ready for a mortgage. We only found out that we were not. I have 6 collection accounts 4 of which are medical. I have 1 CC that is current however has a high balance. My question is out of all of those collections account will it hurt me to pay them off and have them marked as paid or will that hurt my score? Captial one charges off a account and then turned around without my knowledge and places a judgement agaisnt me. Never had been served so until we pulled out report we didn't know about this. Is there something i do about that? I also have a car payment with no late payments in 2 years. but scores still very low.

We have been trying for 2 years to rebuld with no luck.

Any advice will be helpful

Anonymous · ‎05-19-2009

For the medical, visit the medical debt board and read up there. See link below.

Paid and unpaid collections affect your score the same. Paying them without a PFD agreement could result in the accounts updating more current dates could cause some decrease. On the non medical collections, are these being reported by a CA? Are they within SOL? Can you PIF?

On the judgment, contact your local courts and get copies of the judgment and court papers. Find out what "Proper service" is in your area. Also, check the state resources thread below for your state statutes. What is your SOL? What is the DOLA and DOFD on this account?

Read the various links below, helpful information.

RobertEG · ‎05-19-2009

I would only add that no mortgage lendor bases a major grant of credit based only on a FICO score.

As has been stated, paying or not paying a delinquent account has not direct impact on FICO score.

But mortgage lendors do a full manual review, and unpaid, outstanding debt still appearing in your CR is a smoking gun. Most demand their payment as a condition for any loan approval.

Another point to be aware of in most mortgage loans is that the 7 or 7 1/2 year normal dropoff of prior derogs from you credit report is exempted under FCRA 605(b) for any application for credit that is for $150,000 or more.

If it is still in your file, they can see all prior derogs.

Anonymous · ‎05-20-2009

RobertEG wrote:
I would only add that no mortgage lendor bases a major grant of credit based only on a FICO score.
As has been stated, paying or not paying a delinquent account has not direct impact on FICO score.

This is not completely true. When it comes to collections, yes. Other delinquent accounts, NO.

But mortgage lendors do a full manual review, and unpaid, outstanding debt still appearing in your CR is a smoking gun. Most demand their payment as a condition for any loan approval.

If it is small or old collections, many won't require them paid. It varies by lender and what is showing.

Another point to be aware of in most mortgage loans is that the 7 or 7 1/2 year normal dropoff of prior derogs from you credit report is exempted under FCRA 605(b) for any application for credit that is for $150,000 or more.
If it is still in your file, they can see all prior derogs.

While this is true, no one has ever reported it happening. I believe the lender has to actually request a special report.

Anonymous · ‎05-20-2009

THanks for your help

Also do you know what the chances of getting a mortgage with scores below 600? This is our situation. We are currently in a lease to own coming due this year. The owner of the house can not afford for us to move out he knows he will have a hard time selling and renting for the amount we are currently paying (full mortgage payment) would be impossible. He is very concerned and call the bank and talk with present (who already told us their was nothing he could do for us) the owner told the bank that if they don't give us the loan he will have to walk away from the house cause he can't afford it.

The owner seems to think he can make this happen for us I just don't know how with the credit restrictions so tight.