Help With Credit - At A Loss

I ordered myFICO scores and the ones that are considered for home lending are:
TU - 602
EQ - 631
EX - 604

I'm assuming I would have been good to go on this mortgage had this collection not been reported. This is so frustrating.

Unfortunately I think Portfolio Recovery may have covered their bases so there is nothing I know to do. I thought they said they would keep it off my report if I paid but after reading about them I'm sure they just said something to deceive me. They seem to be the hardest company to deal with when it comes to deleting.


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with those scores, i would hold off on the home buying but thats just me

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Me too.

Anyone who is in a position to make a 15 or 30 year commitment to pay a mortgage should have been able to pay an old $1000 debt without a care in the world. A debt that size is chump change.

A better approach would have been to ignore the debt consolidator. Should have called up Capitol One and said "Hey look, I can send you a check today for the full amount if you won't report it as late." They would have jumped at it because their alternative was to sell the debt to a collector for a couple hundred.

If you can't write a check *today* for a thousand dollars to settle an outstanding debt, you need to rent, not mortgage.

I'm not going to buy with this credit score. It was around 700 literally last week when I decided to get pre-approved. I was under the understanding that if I made payments that it would stay off my credit. They fooled me. I'm trying to figure out the best way to handle this collection. There is a lot of conflicting info out there and I've found that the majority of people have no idea about credit.

I left out plenty of info in OP but I should have paid it all then. I easily could have paid in full and have since offered to pay it in full for a delete but they wouldn't do it. I have been saving for a down payment for a house and figured I'd hold the $1,000, while paying under $200/month on it, in case I found a house I liked since every bit helps. Ended up being the wrong decision.

When I got laid off, my wife was still in school. She has been working and making a pretty good income for 2 years now and we can pretty much pay all of our bills with just her income. If I ever did get laid off again, I could make it on a much smaller salary due to her having an income instead of costing extra money for school.

Looking back, I wish I would have called Capital One but I didn't know any better and the collection agency said they could settle for less money. I have since done a ton of research on credit and even though I have built my credit well over 100pts in a little over 2 years(until this recent issue), I still was doing a lot wrong.

We have been paying $1,500/month for our rent house for over 2 years, both have newer nice vehicles, go on vacations often and have still had plenty of extra money to save for a significant down payment. Paying the mortgage won't be an issue.

Please don't take anything as bragging. I'm obviously embarrassed about the situation or I wouldn't be using an alter. I just want people to understand the situation and hope to get the best advice possible from people who actually deeply understand credit. I've learned that credit isn't as cut and dry as just making payments on time. Especially once you've had any negatives at all. Thanks for all the help.

I don't think so. She would be pretty close but I don't think she is quite there. I make a little more than twice as much as she does. We plan on living in this house for a minimum of 10-15 years so we want to get a house with plenty of room to grow our family. We already have 1 kid and want at least 1 more.
I know some will say we are trying to buy too much house. Those that know our finances wouldn't though. This house is more than $200k less than what the lender says we can afford based on debt to income ratio. It is a pretty nice house but the past has taught us to not over extend ourselves.
I'm at a job with very good stability now but could easily survive with a temporary $15/hr job if something happened here. She is an RN so her job stability is very good.
I'm dealing with a guy at a bank who seems to really be going out of his way to get us approved. I know that is his job but once he saw how all this happened and looked at our finances, he's been going above and beyond. Hopefully we can get it done. In the meantime, I'm doing as much research and seeking as much advice as possible.

Looking back I should have paid it right then. As I said before, I was looking to buy a house and was going to use that thousand, along with other money we have saved, as a down payment. I promise I had plenty of money to do it but figured I wouldn't even notice the small amount autodrafted from my account for 6 months and would rather pay as much towards principle on the house as possible.

We make a little north of $160k household. With the bills we have now and the bills we would have with this house, we would be fine with her income plus pretty much any temporary job I could get.

Buying this house would not change our bills much at all. Maybe $200/month. We already both put 15% in our 401k plus have been putting money in savings. As I said before, we aren't living outside our means at all. I have been very good with my credit(increased over 100pts) for over 2 years and she has never had a negative on hers.

I may have left this out but the collection came up a few months ago but it wasn't on my credit and they led me to believe that it wouldn't be on there if I set up a payment plan. It just showed up on my credit and for some reason didn't hurt it much until I disputed it. I disputed it because I thought we agreed that it wouldn't ever hit my credit. Had I never disputed it, I wouldn't be in this predicament. Collectors are very deceiving and that's putting it nicely. I'm kicking myself for not just paying it right then but thought it would be better to spend every bit available on a down payment.

ETA - From my research of Portfolio Recovery, this would be on my credit report even if I paid it in full right then. They report everything and will not budge on it. I still should have paid it off right then though.

Assuming that's all correct, does your wife have a credit card or any debts in here name? Within 6 months of having my first credit card my score was in the 730 range. You may want to look into getting the mortgage in her name if it's that important to you to buy right now. There isn't much you can do to fix your score besides plead with the collector. If that doesnt work then building your wife's credit is going to be the quickest way to buy. If that's the case then get a credit card in her name and put 30-40% of the limit on the card and pay it off in full monthly and her score should shoot up pretty quickly. Before you do that be 100% honest with yourself and decide if you have the discipline to not overspend on the card and not be able to pay it in full each month.

Somehow I just don't believe your story, and that's ok. "This is an anonymous message board. I have nobody to impress" yet, you're using an alter because you care what people will think about you on an anonymous message board.

Anyways, like other have said, the house buying idea you have isn't a good idea right now. I mean, what positive do you gain from buying? Just keep renting until you can pull your score back up. The collection account isn't going anywhere. That ship has sailed.

You're lying to yourself when you say that the collection was "out of your control." Everyone financially responsible has at least 6 months of bills/mortage/rent/car/etc saved up for circumstances that may arrive, like when you get laid off.

I'm not trying to be a dick, but you're trying to make a situation justifiable when it's not. And I believe you're smart enough know that. Good luck in your endeavors

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I will most likely just wait a little longer. This house being such a good deal on exactly what we are looking for is the reason I'm going all out. My credit was truly considered good just a week ago.

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You'll find another house. It sucks now, but it's really not the end of the world. Take a few months work on your score and keep an eye out for what you're looking for. You'll find a house you look, and you'll be in a better position to buy it.

I want this house for sure but I'm not going to finance it at a high rate. Like I said before, I am much smarter with my financial decisions than I used to be. My reason for coming here was to see if anyone had a similar experience or knew what I could do to get my credit to what it was just a week ago. I would have already been approved if that didn't come up last week. We can afford this house and all of our bills with much less than our household income. I wasn't coming to ask if I could afford it. Was just looking for advice on the situation. Obviously the collection can't be deleted so I will just wait. Thanks for the replies.

I called and paid it this morning. I wasn't trying to get out of it. I was trying to get it off my credit report completely. I've been told that a paid collection is pretty much just as bad as an unpaid as far as your credit score goes. In fact, many repair specialist will advise you not to pay it at all and just completely ignore them if they won't delete. I was advised not to pay them without negotiating a delete in exchange. Once a collection is on your CR, it is bad even paid in full.

ETA - The vacationing slowed down this year once we started saving for a house down payment.