Fight or let sleeping dogs lie

Pay them, use a PFD.

 

Depends...

If they are CA's and you don't dispute the debt, then my $.02 would be to pay them with a PFD. Once you wake them up (e.g. by validation), you'll have to do something because they'll know you're anxious (or you wouldn't be making a fuss about them) and will hold out 'til the last minute for the best deal.

If you still dispute the debt, you could start validating which may cause one or two to drop off but you should plan on having to fight each one in court.

Or, you could just leave them alone.

I had a collection account that was 5 yrs old finally taken off (after a bunch of letters and hand wringing) and was rewarded with only a 10-point FICO improvement. That's because old collections, while bad, don't count for much. A recent collection, OTOH, like the one that I've been fighting for the past 4 months, has cost me about 70 FICO points. Recent things like credit-card balances vs. limits and recent "late pays" or collections count MUCH more, point-wise.

So, if they are low-value and really old, you might actually be better off just letting them dry-up and blow away on their own.

 

Excellent (and accurate) post.

 

If your objective is your FICO score, and increasing it, then be careful here. Exactly how OLD are the accounts? You run the risk of LOWERING your FICO score with deleting these accounts! There is a cross over point, where an old "negative" is worth more to your FICO score due to adding age to your accounts, than it does with the negative effect, which decreases with age.

If the accounts are paid, then I may leave them alone when pursuing a mortgage. If they are not paid, then the mortgage lender will require they be paid before any lending. The mortgage company will look at your credit score primarily. The best thing you can probably do is ensure your balances are as low as they can be. This would have the strongest impact on your score.

Again, if these accounts are 6 years old, and paid, then they are probably helping your FICO score with adding "account history".

 

Just sticking my nose in but are any of these medical accts? The lender I am working with says medical accts are rarely looked at mortgagewise.

If you need to PFD get educated on how to do it properly, do some searches for info on it before you do it. Otherwise you may end up with a paid, 0 balance collection which is better than an unpaid one but isn't your true goal of making them go away.

Some programs, like FHA aren't score driven at all and a bit more forgiving credit wise but your scores seem pretty good so you may qualify for some great rates!

Good luck!
Tegleg

 

No problem at all. I sent you a pm, hope you don't mind. Just wanted to share info that I found

Tegleg

 

How many mortgages have YOU had APPROVED while having active, unpaid, past due medical accounts (or any accounts, for that matter) on your credit history?

ALL unpaid, past due, derogatory accounts will be "looked at" when you're trying to obtain a mortgage. Lenders want them paid off.

 

I myself have 2 old medical CA's (2004) that I have disputed because insurance was to have been paid. The FHA lender I am currently working with told me that the med accts would not be considered in the loan approval process. Whether that is right or wrong it's what a lender told me. And I was told if I was viewed stronger in other aspects that could help my loan to be approved.

Other past due debts other than medical would be looked at and considered for loan approval. For FHA that means no bk's in 2 years, no foreclosures in 3years and clean credit since. Luckily I only had one that was reporting incorrectly as not paid. And now that has been fixed to report correctly.

But that is FHA and I realize others may be more stringent. I am only speaking of my experience in the process so far.

And I have found out today I am likely preapproved for a FHA mortgage.
Nothing is absolute until you sign the papers though.

I am just a consumer, that is all and only offered that information in the spirit of comparing knowledge with others like me. But it appears I should have specified FHA. My apologies for that.

I don't claim to be a mortgage wiz because I am not. But this is a consumer board to share knowledge and experiences, no? I shouldn't post information I have received unless I am a mortgage wiz? If I was one I wouldn't need knowledge about the loan process would I?

 

Apparently jshimmer woke up on the wrong side of the bed this morning. Some lenders will want them paid and some will not require them to be paid if they are medical, it just depends.

 

How many mortgages have YOU had APPROVED while having active, unpaid, past due medical accounts (or any accounts, for that matter) on your credit history?

 

I had one mortgage approved with an active, but 4-yr-old, collection (that's all I applied for). I didn't get a grade-A interest rate, but I also had other "negative" factors going against me.

 

Ahh, yes, one of the many fine sub-prime lenders that are now nearing (or in) bankruptcy because their past irresponsible or illegal underwriting practices ...

I was referring to conventional mortgages, not the sub-prime predatory market.

 

Have you received any collection letters on the account from Afni, or is your only source of information on the alleged debt from your credit report?

 

On conventional, I'm originating loans with automated underwriting. Up to $5000 of collections/chargeoffs can remain open.

On my niche products, they look at the past two years and the borrower's "overall willingness to repay".

 

I've had about a dozen buyers approved with open collections.

As a matter of practice, when my clients are in the loan process, or planning to be in the next six months, I tell them not to touch collections until I tell them it's necessary. In most cases it's better to put the money aside for reserves.