Paying off collections

Nem · ‎01-11-2016

Hello everyone!

I have a question on some collection items I have.

One account with Midland Funding I owed about $1,300 on. I made payments on this and eventually paid it off in November 2015. I don't recall if I paid in full or if I settled for less, to be honest. My question here, is do I need to contact them about updating the status on this collection? They said they would update and send me a letter when I was finished, but I haven't received anything. They last reported on this April 2015, according to Credit Karma.

My other two questions are on collections that I have not received notice on in some time. One is from Midland Funding (again) in the amount of $11,533. They are still updating this account but I think it's close to rolling off since its from 2011. The other collection is from Cavalry Portfolio Services in the amount of $16,835. This is back from March 2012. Both collections are gradually getting larger. I want to start paying this off but I can't afford a pay for delete. Should I make payments, or let these roll off? My credit score is almost to the point where I can qualify for an FHA loan, but I'm not sure if having collections eliminates me from being eligible.

Anonymous · ‎01-11-2016

My loan officer advised me not to touch any old collections as it would update on your credit with the date of your last activity and it will further hurt your score.

I'm not certain as I'm trying to rebuild my credit as well. 3 small medical collections 24+ months old, I was told not to touch it. But those collections are wrecking havoc to my credit....

Have you already talked to a loan officer to see what they recommend?

Sorry wasn't much help.

Anonymous · ‎01-11-2016

Oh, I forgot to mention, I was pre approved for FHA with those 3 collections that are open and 1 medical collection paid.

I am hoping to get my credit score up to qualify for a conventional and get better interest rate, so I wouldn't have to pay monthly PMI.

RobertEG · ‎01-11-2016

Letting the collections become excluded from your credit report does not discharge the debt.

It shields the presence of the unpaid, delinquent debt from others who simply pull your credit report, and also removes the derogs from scoring.

A factor will be when you apply for a loan, will the creditor request a disclosure of all unpaid, delinquent debt, and if so, will they require its payment as a pre-condition fo any loan approval, regardless of credit score.

Anonymous · ‎01-11-2016

@Nem wrote:
Hello everyone!

I have a question on some collection items I have.

One account with Midland Funding I owed about $1,300 on. I made payments on this and eventually paid it off in November 2015. I don't recall if I paid in full or if I settled for less, to be honest. My question here, is do I need to contact them about updating the status on this collection? They said they would update and send me a letter when I was finished, but I haven't received anything. They last reported on this April 2015, according to Credit Karma.

My other two questions are on collections that I have not received notice on in some time. One is from Midland Funding (again) in the amount of $11,533. They are still updating this account but I think it's close to rolling off since its from 2011. The other collection is from Cavalry Portfolio Services in the amount of $16,835. This is back from March 2012. Both collections are gradually getting larger. I want to start paying this off but I can't afford a pay for delete. Should I make payments, or let these roll off? My credit score is almost to the point where I can qualify for an FHA loan, but I'm not sure if having collections eliminates me from being eligible.

Consult a mortgage lender/broker about it - they may or may not want those settled.

Nem · ‎01-12-2016

whyzgirl: Every little bit helps! I appreciate it. It's good to know you were approved for an FHA loan with collections still open, but I'm wondering if it's because they were both small and medical expenses, which I think is judged differently?

I had talked to a loan officer early last year and he did advise to not pay any older collections. I was trying to avoid talking to him again because I didn't want a credit pull, but maybe it's worth it if it gets me the information of actions I need to take to get approved.

Anonymous · ‎01-12-2016

@Nem wrote:
whyzgirl: Every little bit helps! I appreciate it. It's good to know you were approved for an FHA loan with collections still open, but I'm wondering if it's because they were both small and medical expenses, which I think is judged differently?

I had talked to a loan officer early last year and he did advise to not pay any older collections. I was trying to avoid talking to him again because I didn't want a credit pull, but maybe it's worth it if it gets me the information of actions I need to take to get approved.

You can always print copies of your own reports from annualcreditreport.com, and take them in with you.