Collection Agency on my report - and I want to buy a house.?

Question

I got unemployed 4 years ago, and had a $6K CC that went to collections. I want to buy a house. All of my bills after I got re-employed are current and in good standing. Altogether I owe about 10k, 9k being student loans that are in satisfactory accounts. Still have collections reaging the debt claiming I owe them this money.

I am not interested in settling because 1) original creditor sold the account and 2) wrote it off as a loss. Me on the other hand am stuck with 7 years bad credit, as consequences of a lay-off. Down to 2 and a half years before the time the FCRA claims I can remove this off my report, 1 1/2 yr from SOL. The collection agency never bothers me, theyjust send me a stern letter twice a year.

So my question is - I almost have the downpayment I need for a small condo, and paying off the collection agency re-ages the debt and does nothing for my score, if anything it is kept longer. So can I still buy a house?

I am not trashy - I just got laid off, and the system is systematically rigged to screw the poor and downtrodden. CC cos sell your account and info within 3-6 months of non-payment AND get the writeoff. And because you just can't make eneds meet, you get stuck with massive scars for the next several years in your life. Under the current system there is no incentive to pay anything - I am about progress and moving forward...unemployment was insult - everything else is injury - and I am not there now - why should I contribute to a multi-billion dollar industry that does nothing to benefit me??? I work hard enough...and I am not going to work for anybody but me and my interests...hello??

Answer 1

Hate to be the bearer of bad news, butthe 7 years starts from whenyou pay them off. Being laid off from work does not absolve you of having to pay back the people who lent you money.

I would recommend negotiating a pay to delete letter from them. Pay them at least a portion of what you owe them in exchange for a letter deleting the collection from your report.

As an alternative, you could settle the account with them and then, a few weeks later, dispute the entire account with the credit bureaus. Since they will have been paid, they are not likely to respond to the dispute letter on time and it can be deleted that way as well.

Answer 2

Of course you can still buy the house.

The lender may ignore it altogether, or ask you to pay a certain amount toward it, who knows.

When I bought my condo, I had an old collection of $571 that was 6 years old. The lender wanted it paid down to $500. I had to give the attorney a check for this debt at closing. Because she couldn't figure out who the collection agency was, she returned the funds back to me a month later. The debt fell off of my credit report a year later.

Answer 3

All right. Let's see here....Just because something falls off of your credit report does not mean that you are no longer responsible for it. Say you do wait and let the debt drop off...you buy a home and guess what?! The CC sees that you have an asset (ie real estate) and puts a lien on your house until you pay them. That's not a fun option.
Paying off the debt does not re-age the account. The seven year rule starts from the date of last activity (which is usually when the account was turned over to collections). After that it must fall off - period.
You're right. Paying your debt will not do anything to your score, but it will enable you to buy a home faster.... Most lenders will want to see that you have no open collections or charge-offs on your account before they give you a loan. I guess to answer your question, no...you cannot buy a condo with major blemishes like that on your credit. (not with a reputable lender, that is!)

Answer 4

There are many lenders who would liklely ignore that collection in the loan process. Check out the free evaluation form at the source website. Good luck.