How should I pay these accounts?

[Anonymous]

Here is my scenario:  I'm looking at applying for a mortgage within the next 4-6 months.  However I have two accounts that I don't know how to deal with:   

ACCOUNT 1

  HSBC account which is being shown as bad debt/collection.  It is now in the hands of Island National, and they offered me a settlement of $ 263.00.

 Status as of [?] Dec, 2008 Date opened [?] Aug, 2006 Date of last activity [?] Mar, 2007 Date closed [?] Not Reported Account number [?] Not Reported Loan type [?] Not Reported Largest past balance [?] $527 Terms [?] Not Reported Account Type [?] Revolving Account holder [?] Individual Scheduled payment amount [?] 0

The above is reporting bad debt/collection under the accounts section of all three reports.  However it is not listed under collections on any of them.

ACCOUNT 2

Collection agency [?] Jnr Adjustme Original balance [?] $569 Current balance [?] $569 Status [?] Not Reported Date assigned [?] Mar 30, 2007 Date reported [?] Nov 01, 2008 Date last active [?] Not Reported Date paid [?] Not Reported Date closed [?] Not Reported Original lender [?] Dollar Thrifty Auto Group Account number [?] XXX7145 Type of account [?] Not Reported Account holder [?] Individual Type of credit [?] Not Reported Payment status [?] Not Reported Largest past balance [?] Not Reported Amount past due [?] Not Reported Account descriptions [?] Not Reported

The above second account is listed under collections only.  It is not listed on the accounts tab, and it is only on my Transunion report.  It is originally from Dollar Thrifty.

I can pay both of these accounts off in full immediately if I need to.  However, I would like to know what is the best way to go about paying these accounts, with no negative effect to my fico score.  Or, should I just not pay them until after I apply for the mortgage?  Both accounts have been verified, so I've already tried that.

Any help is much appreciated.

[203bravo]

Best advice is to meet with your loan officer and see what they have to say about the situation.  4-6 months is not really a long enough period to deal with them without knowing how the loan company want to deal with it.  Some companies want to have them paid in full at closing.

[kjm79]

Yes.  Definitely wait to speak with your loan officer before doing anything with these accounts.  But also definitely keep the money to pay them off in full set aside just for that purpose.  For the account that offered to settle with you, you may be able to offer to pay them more or in full if they will agree to delete the account in its entirety (just get it in writing!).  You know that they are willing to work with you as they've offered a settlement, so maybe give them a little more motivation and get them to delete.  A settled account is just as bad as a charge off/bad debt/collection account.  And actaully could be worse, because when you pay to settle, this updates the account and makes it look like a newer "baddie". 

[Anonymous]

Account #1    What is the DOFD reported by the OC?  What is your SOL?  Who owns the account?

Usually the OC will not delete even when paid.  If they still own the account they might accept payment and they will report *paid after CO*  This will be accepted by a mortgage co. but it will not help your scores    BUT, if they sold the account then you must deal with the CA.

If the account was sold then send the DV letter  CMRRR. If the CA answers the DV and you are past SOL they will usually accept a PFD for less.

Account #2  Again what is the DOFD....is the OC reporting......did you send a DV  CMRRR???

[Anonymous]

Both of the accounts ARE verified.  They are mine, so I won't dispute them.  What I would like to find out is whether or not I should attempt a PFD, on both of those accounts, prior to applying for a mortgage. 

Also, the Thrifty collection is not reported under accounts only in the collections tab, and only on one report.  If I just pay that account in full, wouldn't it just dissapear?  It's not a credit card or a monthly payment, just a collection, so is it even hurting my score?  If it is, will paying it increase my score?  The HSBC, I will most likely leave alone until I talk to a loan officer, but the Thrifty I'd just like to pay.