Applying for 1st mortgage and found an old collection on my credit report (paying, rate)

[James202]

Hello everyone, I'm using a different username as I'm a bit embarresed

I am beginning to look at my first home purchase and have spoken to a realator and broker. I ran my credit with Equifax a couple weeks back and it came back with a 755 score. I saw that there was a collections from a school dating back to 2006 for 450 bucks. I remember disputing this a while back and completly forgot about it. But since my score was 755 I didnt think much of it and was just going to let it be till it drops off.

I just had the broker run my credit and it came back with a 689 credit score from Equifax, 710 from Experian, and 709 from Transunion. I almost fell out of my chair, but they told me when a broker runs your credit it normally comes back with a lower score... Does that sound right?

They told me that if I were to get the collection taken care of a 30yr rate would be 4.25, as my credit stands it would be 4.75. I would be putting about 15% down, have no debt, and the payments would be managable for me. Do these rates sound decent for my situation? What would be the best route to get the collection taken off my report. I have no issue paying it off to have my score jump.

Apologize for any simple minded questions and thanks for looking.

[long101]

Originally Posted by James202

I ran my credit with Equifax a couple weeks back and it came back with a 755 score.
I just had the broker run my credit and it came back with a 689 credit score from Equifax, 710 from Experian, and 709 from Transunion. I almost fell out of my chair, but they told me when a broker runs your credit it normally comes back with a lower score... Does that sound right?

I dont know much about credit scores, but it doesnt make any sense that there would be a 66 point drop because a broker runs your credit. I would think they would pull the same info... If that is true I may be in some trouble as well. Maybe try reaching out to equifax?

[Dreams2Plans]

Originally Posted by James202

I almost fell out of my chair, but they told me when a broker runs your credit it normally comes back with a lower score... Does that sound right?

Yep, same thing happened to me.
They use a different scoring systems for times when YOU pull your credit (straight from bureau) from when THEY pull all three credits for you.
I also had a very similar difference of 60 or so points. Very disappointing. (I checked mine with Experian before. But then I used a different agency - for all 3 reports, and those scores were pretty much the same as what the banks saw!)

[Dreams2Plans]

and to add:
I very recently heard that any collections would have to be paid prior to closing, as there could be a risk for collection agency placing a lien on future house to get paid - and banks don't want to risk that happening.
Not sure if the amount matters, though.