Collection Acct. being reported as a revolving acct???

[Anonymous]

I need some help here. My husband and I are trying to get mortgage ready, and there seems to be a major issue, between reports.

The ONLY unpaid collection we have is to Midland Credit Mngmt, for an old visa card. On TU and EXP it is listed as a collection acct.

However, on EQ, they have it listed in Accounts, and count the balance as our current revolving debt.

Everything I read say not to pay the collection prior to obtaining a mortgage, to wait until closing. Yet EQ score stimulator averages a 20+pt. gain by paying this account??

Any Advise??

[RobertEG]

In my opinion, you are probably being misled by the bad formatting in whatever consumer credit report you are using.

YOU only have personal acounts with an OC, not a debt collector.  You never have a revolving or installment account with a debt collector.

CA "accounts" are only between the debt collector and the CRA, not with you.

What you are probably seeing is that the OC account is still in your credit file, and the CRA is formatting your CR to incorrectly list that the OC account information was reported by the debt collector. 

Not paying a collector prior to mortgage settlement is not, in my opinion, typical advice.  Most mortgage lendors will require collection settlement prior to loan closing

Paying before mortgage application, in my opinion, makes more sense.  What is the logic you have been offered behind not taking care of existing bad debt prior to mortgage application?.

[LIGHTNIN]

I agree with RobertEG, on paying the collection. Better yet I would send a PFD letter to Midland Credit Mngmt,as long as you have the money to PIF.

A PFD (Pay for delete) letter is an agreement that you pay the collection, and they agree to delete.

Info about this can be found on the Rebuilding Your Credit board.Also check out the stickys at the top of that board for helpful information.

You also need to know your states SOL.

[Anonymous]

I've heard advice that would make his statement make sense. It was a slightly different situation, but hey. The idea was that, if you can't get the PFD, inquiring about an old collection will bring it current and hurt your credit score. Leaving the past in the past until the mortgage company pulls his report will keep the initial score higher. If after the mortgage company pulls the report they insist that he pay in full before they make the loan, he's no worse off than if he pays now. If however he pays in full now and they don't delete the record, will that bring the negative mark current?

[MarineVietVet]

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@Anonymous wrote:

I've heard advice that would make his statement make sense. It was a slightly different situation, but hey. The idea was that, if you can't get the PFD, inquiring about an old collection will bring it current and hurt your credit score. Leaving the past in the past until the mortgage company pulls his report will keep the initial score higher. If after the mortgage company pulls the report they insist that he pay in full before they make the loan, he's no worse off than if he pays now. If however he pays in full now and they don't delete the record, will that bring the negative mark current?

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I used to think this same thing but this doesn't apply to collections. Since HTSU explains things MUCH better than I can I will C&P this from one of her posts:

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.

I have begun to try and undo some of the harm I've done in the past by giving out incorrect information about collections.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".