Credit Tip #1 - Paying Off Collection Accounts and Charge Offs

By
Mortgage and Lending with Guaranteed Rate NMLS #151088

Think twice before you pay off collections accounts or charge offs.

For someone wanting to pay off collection accounts, it is suggested that you do it as part of the loan approval process.  Paying off a collection account can actually bring an old account to a current derogatory status.  That may in fact lower your credit score instead of raising it.

If you are not planning on purchasing for several months or longer, then paying off a collection account may actually help you.  There are some creditors who will continue to report the account as delinquency each month that the debt goes unpaid.  Paying off an account like this may help your credit score improve quicker.

Before you take any actions, be sure to consult with a mortgage professional.

 

 

 

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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  

 

Programs Include:

 

  • Conventional (Fannie Mae & Freddie Mac)

  • FHA, USDA, & VA

  • Jumbo to $3,000,000

  • Bank Statement Program for Self-Employed Borrowers

  • Foreign National Program

  • Investor Cash Flow

  • Non-Warrantable Condos

  • Georgia Power Leaseholds for Lake Burton, Rabun, & Seed

 

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  • Rodney Mason is a Licensed Branch Manager located in Atlanta, GA.   He can be reached at (404) 591-2453.
  • Providing financing for all cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

    Providing financing for all cities across Alabama including:
    Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

  • Providing financing for all cities across Florida including: Altamonte Springs, Atlantic Beach, Boca Raton, Bradenton, Cape Coral, Clearwater, Coral Springs, Daytona Beach, Delray Beach, Destin, Fort Lauderdale, Fort Myers, Fort Walton Beach, Gainesville, Hollywood, Homestead, Jacksonville, Jupiter, Key Largo, Key West, Lake City, Largo, Marathon, Mexico Beach, Miami, Naples, New Smyra Beach, Ocala, Orlando, Palm Coast, Panama City Beach, Pensacola, Pompano Beach, Port St Joe, Sanibel Island, Sanford, Sarasota, St Augustine, St Petersburg, Tallahassee, Tampa, Vero Beach, West Palm Beach, & Winter Park, and many more.

 

  • Providing financing for all cities across South Carolina including: Aiken, Anderson, Beaufort, Bluffton, Charleston, Columbia, Conway, Edisto Island, Florence, Greenville, Hilton Head, Johns Island, Myrtle Beach, North Augusta, Orangeburg, Rock, Hill, Spartanburg, Sullivans Island, Summerville, and many more.  
  •   

    Providing financing for all cities across Tennessee including: Athens, Brentwood, Bristol, Chattanooga, Clarksville, Cleveland, Cookeville, Dyersburg, Franklin, Gatlinburg, Greeneville, Johnson City, Kingsport, Knoxville, Maryville, Memphis, Morristown, Murfreesboro, Nashville, Newport, Oak Ridge, Pigeon Forge, Sevierville, and many more

 

All mortgage lending guidelines are accurate at time of post, but are subject to change without notice.  Please call for the most current information.

    

           

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Ambassador
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Rodney,

It is like waking up ur contact is the activity., and yoa dormant beast. The count goes from the last activity. Interesting, it is good to pay off, but it can hurt

Mar 11, 2011 02:21 PM #1
Rainer
215,228
Adam R. Cohn
STANDARD MORTGAGE CO. - Delray Beach, FL
We actually get mortgages closed FAST!

Good point, thanks for the blog.

 

Have a great night!

 

Adam

Mar 11, 2011 02:22 PM #2
Rainmaker
414,551
Rodney Mason
Guaranteed Rate - Atlanta, GA
AL, GA, SC, & TN

Jon....Yes, paying off an account does make its last activity more recent.  Collections should be paid off, but timing is everything.

Adam....You are welcome.

Mar 11, 2011 02:25 PM #3
Rainmaker
863,796
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Hey...great info. Thanks for sharing it with us.

Mar 11, 2011 02:29 PM #4
Rainer
111,614
John Saari
Worcester, MA
"The Mortgage Buddy"

Nice post so many people forget about the charge offs. Keep up the great work.

Mar 11, 2011 03:22 PM #5
Rainmaker
760,838
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Wel who knew? Obviously, YOU do...and now I do!

I'm doing a blog series about Real Estate terms in Georgia. I've already done the part about being pre-approved for a mortgage BEFORE you begin to shop for your new home or condo, and this would be the kind of thing your mortgage broker would discover and be able to help with!

Thanks Rodney!

Midtown Atlanta Condos For Sale

Mar 11, 2011 11:32 PM #6
Rainmaker
414,551
Rodney Mason
Guaranteed Rate - Atlanta, GA
AL, GA, SC, & TN

Sarah...You are welcome.

John.....Yes, borrowers can easily make the wrong move here. 

Thom....There are lots of things like this that people do.  I will check yours out too.

Mar 12, 2011 01:08 AM #7
Rainmaker
601,332
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Rodney - Great info!  Its so sad to see prospective borrowers do something like this thinking they will help their scores and then they bedome devastated when it actually has the opposite effect.

Mar 12, 2011 07:55 AM #8
Rainmaker
414,551
Rodney Mason
Guaranteed Rate - Atlanta, GA
AL, GA, SC, & TN

Donne....So true.  I pulled a credit report today for someone.  There were two collections that were a few years old.  Both were reporting as though they were late last month.  Paying those two off should help them moving forward.  Sometimes its just the opposite though.

Mar 12, 2011 11:18 AM #9
Rainmaker
374,302
Donna Yates
BHGRE - Metro Brokers - Blue Ridge, GA
Blue Ridge Mountains

Rodney: Great advice and I'll keep it mind when screening potential buyers.

Mar 20, 2011 04:27 AM #10
Rainmaker
414,551
Rodney Mason
Guaranteed Rate - Atlanta, GA
AL, GA, SC, & TN

Donna.....It can hurt more than help sometimes.

Mar 20, 2011 05:10 AM #11
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Rainmaker
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Rodney Mason

AL, GA, SC, & TN
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