I burst their bubble today. That couple who took some bad advice from another loan officer last year and started paying off all of those little bills from 5 yrs ago..... well, they did it..... they got it all paid off!!!! And their credit looks like a train wreck. Their scores dropped a LOT.
What happened?
They took an old unpaid collection from their credit report and paid it off. Making that trade line a very recent 'paid collection'. The FICO score had all but forgiven that past stuff because these folks have a good recent pay history. Now, it looks like they have not paid on-time recently.
It is unfortunate that the system works the way it does.... and that is why I have put together this FREE e-book about credit. Just go to my website an d it for free. Nothing to sign up for unless you want to be put on my mailing list.
If you really want that home at a decent interest rate..... it 'might' be best to leave those old collections alone until after you close. Because, time and again, I have seen folks pay their way out of a home because they were not rewarded by the credit scoring system(FICO) for paying off old debts.
http://www.dallasloanguy.com/docs/about_credit.doc
http://www.dallasloanguy.com/docs/about_credit.pdf
http://www.dallasloanguy.com/resources.shtml
DallasLoanGuy.com provides free one-on-one credit consultations to ANYONE who will FIRST take the time to read this free book and purchase a scored credit report. This information can save people thousands of dollars over the life of their loan.
