I am planning to buy a home within 2-3 years since it will take that long to repair a horrendous credit record. I was advised that all collection accounts must be paid but according to the board, that is risky. Will they accept payment without re-aging the accounts? Is there any alternative? Are charge-offs worse than collections and if they are paid will a paid charge-off fare better than an unpaid one? I'll admit, I've been a poor money manager, poor saver, lived above my means and without a budget, but I've learned from those mistakes. I now have a handle on monthly expenses and am beginning to establish better savings habits, but have no idea where to begin with a low 500 score. Seeking some board wisdom. Thanks.
Fixed the quote In 2-3 years, any debt that is now 5 years old now will be gone, so I'd suggest forgetting anything that happened before July 2004. You can always try disputing the entries with the CRAs. Don't do 15 TLs at once, but pick 3-5 and see if they go away. Unfortunately, the CRAs are terrible recordkeepers. From what I've read, an unpaid debt is the same as a paid debt as it relates to your score. But when going for a mortgage, a lender will look at more than just your score. I would venture a guess that a 4-year-old debt that was paid in full 2 years ago would look better to a loan officer than a 4-year-old debt that has never been paid (assuming your credit stays clean in the meantime).
There is probably an algorithm used to mark how your account is handled; someone who repeatedly submits requests daily gets ignored or rejected, while a consumer who submits one request ever gets viewed as "less risk of trying to shirk responsibility". Then again, maybe not. I'm guessing here. There's no hard limit on how many disputes you can make, but I'd still be selective. At least spread you disputes out over time. Make no more than two or three to each CRA per quarter.
