Verizon Collections

[Anonymous]

Quetion about best course of action. I'm 6 points away from qualifying for a mortgage. I have one collection from Verizon that I dispute being counted as part of intallment loan balance or credit card balance. It looks like I'm going to have to take Verizon to court. I believe the item is an error but it does me no good to have a positive resolution in a year. If I pay off the collection item... currently listed on my CR as an account... with the collection agency will it help my FICO score? Will I get the 6 points I need or harm my position?

Verizon refuses to accept payment. They want me to pay Diversified Consultants, Inc. I can but I don't want Diversified to pop something on my credit report if I pay them and claim I validated the debt.

Help... 20 days to close or I lose my earnest money.

[Anonymous]

Hope you will get the advice you want.  While you are waiting for people to chime in, can you tell us whether the lender knows about the collection and whether the loan officer has asked you to pay the CO as a condition of approval (not uncommon)?

Also, you use the phrase "I dispute" -- do you mean that you have formally disputed the item?  If so it has likely been removed from consideration by FICO and hence paying it could only hurt your score.  On the other hand, when it comes back validated that will also hurt your score (assuming it is currently suspended by FICO from consideration).

[Anonymous]

“Dispute” was a poor choice of words. I have not disputed the item with the credit bureaus but I did file a complaint with my state Attorney General office. Verizon refused to take part in voluntary mediation. The state mediator agrees with me and has forwarded my complaint to agency lawyers to review.

However that doesn't up my score the necessary six points. If I pay the collecter and the amount Verizon claims I owe whats the effect on my score?

[Anonymous]

Are you familar with the Pay For Delete option that some people are able to get the CO to agree to?

[Anonymous]

I asked Verizon about that... all the way up to a VP. I’ve been speaking with various members of their executive Resolution team without success.

I’m certain the attorney general’s office is going to become involved which means my long term chance of success is good but I need short term results.

So my original question remains. If I pay off the debt to the collector how will the payoff be reported & what will the effect on my FICO score be as a result.

The FICO score simulator says my score will jump 20 points but it doesn’t take into consideration who reports the payoff & I have no idea either.

If Verizon reports the payoff then I dont see any potential harm, but if the CA reports it then what?

The CA says Verizon still owns the debt.

[Anonymous]

The quickest way to gain 6 points is probably through CC UTI, the collection is a big fish but even in the best case scenario, PFD, it probably won't report to CRAs within the 20 day deadline, instead you might still have a shot at CC UTI depending on your CC balance and statement dates. List your CC balances, limits and statement dates, let's see if something can still be done in 20 days.

[Anonymous]

My credit card utilization is zero except for the Verizon bill. I paid off both of my credit cards. I have two cards; each with a $500 limit and zero balance. The Verizon bill is $300. 

[Anonymous]

Perfect, when are the statement dates of both CCs? Who are the issuers?

[Anonymous]

They have already reported zero balance. The first was 8/5 the second 8/20. The only outstanding balance is the Verizon amount. 

[Anonymous]

You left about 15-20 FICO8 points on the table by zeroing out both cards, the all zero penalty. Charge something on the card that is reporting on 9/5 and let it report the balance to the CRAs and you will get those points back, how that will translate to the mortgage scores someone else will have to comment, it would not surprise me if you get those needed 6 points and possibly more.

Furthermore, some lenders, like Discover and maybe Amex (not sure), will make mid cycle reporting on request, if the card reporting on 9/5 is one of those, you might not even have to wait for the statement date.