Q: I have a few medical collections that are reporting on my credit.
Should I pay them or leave them alone? I live in NC, which has a statute of limitations of 3 years, but I am looking to get approved for a home loan soon, and I don't want those to be a problem, they are 3.5yrs old.
A. It really depends. Since it is past your statute of limitations you don't have to worry about being sued for a judgement in order to pay it, BUT if they can make your overall credit profile look good (aka increase your credit scores) – and it doesn't cause a financial hardship, pay it. Lenders for FHA financing ignore Medical Collections anyway. I'd look at if they are currently reporting on your credit reports on a monthly basis, that makes a difference as well (explain this in my Fire Your Medical Collections course)
I actually have the most success with Pay/Settle for deletes with medical collections. Typically if you pay/settle the account with an agreement – Made BEFORE $$$ is submitted – they'll delete it. Now that will look good prior to getting approved.
I'd also look at everything else that is reporting – positive and negative – to ensure that everything is on the up and up – not too many addresses listed, low balances on all revolving accounts, etc.
Most loan officers will give you tips for improvement in order to correct be approved/improve your interest rate, ask smile emoticon. Good luck in your home search!
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