What are my options

[speedyo]

Ok for started my Transunion is 585 and i have been trying to buy a house. I have 3 credit cards that i have maintained less then 15 percent debt over the last 2 years no late payments. I went in to a local mortgage office andI was informed that i have 3 collections out. 1 i knew of the others are 50 dollars each from electric companies which is weird since they gave me my deposit back.. So i settled the 2 with electric companies. The 3rd one that i knew about is a old credit card. last activity date is 06/08 and was sold to another company on 10/2010. It is 7000 balance due. My question is should i be trying to settle with them for a fraction of the cost? Would this actually help me score and allow me to get a home loan? I was also told i could get a loan with 20 percent down and my credit would not matter. So should i just blow it off and keep saving and put 20 percent down which gives me a smaller house payment or should i work on the collection and my credit score? I keep hearing the damage is done leave it alone. Thanks in advance

[jcraig]

Ok for started my Transunion is 585 and i have been trying to buy a house. I have 3 credit cards that i have maintained less then 15 percent debt over the last 2 years no late payments. I went in to a local mortgage office andI was informed that i have 3 collections out. 1 i knew of the others are 50 dollars each from electric companies which is weird since they gave me my deposit back.. So i settled the 2 with electric companies. The 3rd one that i knew about is a old credit card. last activity date is 06/08 and was sold to another company on 10/2010. It is 7000 balance due. My question is should i be trying to settle with them for a fraction of the cost? Would this actually help me score and allow me to get a home loan? I was also told i could get a loan with 20 percent down and my credit would not matter. So should i just blow it off and keep saving and put 20 percent down which gives me a smaller house payment or should i work on the collection and my credit score? I keep hearing the damage is done leave it alone. Thanks in advance

 

Keep saving and don't give up - it will be worth it in the long run

 

Most of the time - you won't have to settle

[IAmOnMyWay]

Check out the mortgage and credit forum. Your mid score needs to be 640. Start by getting all 3 scores (can the bank tell you what they are?) Some debts that are 5 years old charge off may not be necessary to pay off. Find out your states statue of limitations, after which that debt should fall off your report. Utilization is only part of the equation in getting scores up. Do you have any other revolving debts that you ate paying on time such as car notes, student loans, personal loans

[breeze]

If/when you pay the old CC, it will drop your score like a rock unless they remove it. If it is past the SOL in your state, you might be able to negotiate that. If not, then talk to your broker about paying it at closing - they can escrow the money, pay it after you close, and it will not impact your score prior to closing.

 

Our insane system actually lowers your score when you pay off an old debt. Be very careful talking to them if you must, and don't sign anything or offer any "good faith" money to the CA. It could restart the SOL. They can be tricky.