HellBill » Hell Bill Area: » Bill/ Bills » credit score increase once I pay off the collection agency

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  #1 (permalink)
: I'm a 26 year old man that is trying to get a 60k loan to buy my first home. The mortgage broker told me that in order to qualify for a USDA loan, that the 2 applicants (my girlfriend & I) have to have 2 separate credit scores of 620. My girlfriend qualifies because she has that. On the other hand, I don't.

I have never had a credit card or any form of credit. I have a $507 collection for not paying last months rent at an apartment complex and I have a $79 collection for a cable bill that didn't get paid.

RENT COLLECTION [Opened--Jan, 2007][Reported--June, 2012]
CABLE COLLECTION [Opened--Aug, 2011][Reported--Mar, 2012]



Today's date is June 30, 2012. I'm going to call both collection agencies and settle the accounts and get them to send me the settlement in writing that once it's paid, it will be deleted from my credit report.

QUESTION: WILL SETTLING THESE ACCOUNTS INCREASE MY CREDIT SCORE SUBSTANTIALLY? OR HAVE A SMALL EFFECT?

QUESTION: WHAT'S THE FASTEST WAY TO GET MY CREDIT SCORE TO 620 GIVEN MY SPECIFIC SITUATION?


Thanks to all who can help.
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  #2 (permalink)
: paying them off or settling will not
raise score much.

biggest danger u have is a loan with
some one u not married to.
often best way to get homeless.
DO NOT DO IT.
u leave u open for foreclosure and
world of financial problems.

visit dave ramsey to learn from others
costly hard pain full life lessons
so u do not pay for them.
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more..
  #3 (permalink)
: The credit reporting agencies protect their scoring model, so there's no way we can give you any definite answers. But the damage to your score has already been done. The best you can probably hope for is a 20 point increase. Then as time goes on, your score will improve over the next 2 years if you pay your other debts on time, every time. I really don't know if they actually send these "pay for delete" letters or if they do, they are just included in your profile. It has always been said that truthful information cannot and will not be removed from your profile. But if by chance they are deleted, you'll get a larger score increase, but how large again is anyone's guess. And depending how far below the 620 target you are, the time factor to raise your score is unknown.

Good luck.
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