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Old 02-06-2013, 11:08 AM
 
4,015 posts, read 5,436,108 times
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I was shocked yesterday when my mortgage guy told me my credit was only 704. I was expecting closer to 800.
Here's the short story.
When my CR was pulled in Aug '12, there was a $58 medical collection that I wasn't even aware of. So, I paid that off in Aug/Sept (4-5 months ago). Everything else is perfect.

My mortgage guy said that since it was on there in Aug and another transaction occured (paying it off and it now being 'closed') that my credit is impacted 40+ pts per incident. Therefore, even though it was only $58 and I paid it as soon as I heard it was there, my credit report isn't reflecting this with being where it should be.

Will a collection agency remove something like that if it's impacting your credit?

What other suggestions anyone have?

This 704 is hurting me from getting the rates I should qualify for.

Thanks
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Old 02-06-2013, 11:20 AM
 
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I wouldn't worry about it. I understand your concern but really if it were I, I'd tell them to roll up that credit report real tight and shove it where the sun don't shine. And have-----life is too short to worry about a report card when one is an adult. One thing I learned a long time ago is those credit reports are not for your behalf and it means absolutely nothing when the chips are down. If it pertains to major issues dealing with credit, any banker with any common sense can tell from that report that your are a good credit risk and you should not be penalized. If one wants to penalize you, it because they are looking for any excuse to do so. Barring my little rant, in time that blip should vanish. Of course you could fight it but I wouldn't, but that is just me.
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Old 02-06-2013, 11:23 AM
 
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Originally Posted by jmking View Post
I wouldn't worry about it. I understand your concern but really if it were I, I'd tell them to roll up that credit report real tight and shove it where the sun don't shine. And have-----life is too short to worry about a report card when one is an adult. One thing I learned a long time ago is those credit reports are not for your behalf and it means absolutely nothing when the chips are down. If it pertains to major issues dealing with credit, any banker with any common sense can tell from that report that your are a good credit risk and you should not be penalized. If one wants to penalize you, it because they are looking for any excuse to do so. Barring my little rant, in time that blip should vanish. Of course you could fight it but I wouldn't, but that is just me.
But is the loaner is going to base my rates off of that credit report and you have the gov't involved (Sallie Mae, etc), aren't they going to have to use that CR and base the load product I'm eligible for off of that number?

I have enough liquid cash to buy the house outright and that alone should prove that I'm a very low risk borrower.
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Old 02-06-2013, 11:28 AM
 
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I seriously think you have nothing to worry about. Your rating is not bad either, perfect no, but clearly you're a safe risk. And you owe nothing and it was only $58 dollars. Don't sweat it.

Last edited by jmking; 02-06-2013 at 11:57 AM..
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Old 02-06-2013, 02:32 PM
 
Location: northern va
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Quote:
Originally Posted by jmking View Post
I seriously think you have nothing to worry about. Your rating is not bad either, perfect no, but clearly you're a safe risk. And you owe nothing and it was only $58 dollars. Don't sweat it.
depending on the loan program the thread starter is potentially using, a score above a 740 may provide a better rate.

TS, your mortgage guy may work with a company like Kroll Factual Data (Home | Kroll Factual Data) that can update the tradeline for you. usually takes 2 weeks or so..

not all lenders can/will offer this, it may require you to contact the company that the acct was with and request a letter stating the balance is zero and the acct is closed. you then provide that letter to the credit bureaus to update your acct
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Old 02-07-2013, 07:23 AM
 
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Originally Posted by kww View Post
depending on the loan program the thread starter is potentially using, a score above a 740 may provide a better rate.

TS, your mortgage guy may work with a company like Kroll Factual Data (Home | Kroll Factual Data) that can update the tradeline for you. usually takes 2 weeks or so..

not all lenders can/will offer this, it may require you to contact the company that the acct was with and request a letter stating the balance is zero and the acct is closed. you then provide that letter to the credit bureaus to update your acct

That's exactly the problem. Because I'm not above 740 (like I should be), I'm going to pay .25-.5 higher on my rate than I should.
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Old 02-07-2013, 07:45 AM
 
Location: northern va
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Originally Posted by lenniel View Post
That's exactly the problem. Because I'm not above 740 (like I should be), I'm going to pay .25-.5 higher on my rate than I should.
then it should be a relatively easy correction. if your loan officer does have the means to use a company like I referenced earlier, you can contact the account holder directly and request the letter to then update the bureaus.

will take longer going that route, so I'd definitely check with your loan officer for their advice.

good luck!
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Old 02-07-2013, 09:21 AM
 
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I don't think there is any correction to be made. That is how credit reporting is done. It was a collection, so I highly doubt they are going to remove it from the report. I also don't know how your mortgage guy can put a number on it like 40 points.

It is definitely one of the crappy parts of the system (getting knocked for a $58 bill), but...
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Old 02-07-2013, 09:50 AM
 
Location: Southern New Hampshire
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Originally Posted by TimtheGuy View Post
I don't think there is any correction to be made. That is how credit reporting is done. It was a collection, so I highly doubt they are going to remove it from the report. I also don't know how your mortgage guy can put a number on it like 40 points.
^^^This.

OP, you may have had some leverage with the collection agency before you paid them -- i.e., you might have been able to get them to agree in writing to remove the item from all credit reports if you paid it (since many people don't ever pay those collections). Since you paid them, they have little if any incentive to remove the item, although there's no harm in asking.

You could also challenge it with the credit reporting agencies, but at best the item will disappear temporarily, then re-appear once they confirm that it was accurate.

(As an aside, though, I had thought that the credit rules changed with regard to very small collection items being able to affect credit reports/scores as much -- does anyone else remember something like this?)
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Old 02-07-2013, 10:06 AM
 
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I think a collection stays on your report for 7 years. You can go directly to the credit websites and dispute it, or could have before you paid. Sometimes if you do that enough, you'll get someone in the collection office who really doesn't feel like looking it up if its a few years old, and will just not respond, and this gets it off your record. The second you pay it, it restarts the clock on how long it stays on your report. And a closed account, like closing a credit card account, is a separate ding. So by paying you affirmed it was your late unpaid bill, that you were in the wrong.

If a place goes just by the score, then you're stuck, if they actually read the report, you may get a better rate. I had one of those tiny lab fee things on my report when I got my mortgage, I didn't even know about it, it was a separate xray charge. I paid it direct to the lab, and the bank accepted that even though it was still on my report. I then kept disputing the charge on my credit report with the collection agency until they finally took it off.

Probably not worth much now, but creditkarma.com is awesome and free.
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