I am in the process of trying to obtain a mortgage. My current mortgage credit scores are 703 (TransUnion), 629 (Equifax), and 624 (Experian). The mortgage loan officer told me they use the middle score, so that is the Equifax (FICO 5) score that I have to work on.
That score was a 635 about 2 weeks ago, but I had a credit card (which I had co-signed for my ex wife, and she ran it up and didn't pay it) drop off my reports (it was my oldest line of credit and had the highest credit limit). So, instead of my score improving, because of the falloff and the mortgage company running my credit history, I went down 6 points.
Now I have more ground to make up and I am trying to figure out what the best way to do so is. I have 4 medical collections showing on my report. The loan officer told me they don't take medical collections into consideration, which is great, but obviously they do, because I have heard that the FICO 5 score places heavy emphasis on collections. I have successfully disputed one, which is supposed to be removed. 2 others total about $270, and the other is around $350.
My question is, since the loan officer says they don't take medical collections into consideration, would I be better off to take the $270 and dump it on a credit card balance or should I pay off those 2 collections? I am torn since I have seen where it says the FICO 5 DOES take collections into consideration, and if that's what the bank is using to make lending decisions, I would think it would be better to get two collections taken care of and hopefully get the company to remove them from my report since that might make my score. If they were using the FICO 9, which doesnt count medical collections, I could understand, but I'm really confused as to what I should do. Thanks for any advice!
