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Cher32

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Hello, I have one collection on my credit from college, not student loan, money I owe the school...
I am wondering once I pay with the collector will that make my credit score go up and how long will it stay on my credit report? Im in the process of trying to buy a home this summer and just wondering if that one thing will effect me getting approved. Right now my credit score if ruffly 684, I have been working on getting this up for a while now. I have paid off all my credit card debt and just need a little insight on how I should proceed. Thanks for all tips & comments.

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the collection will stay on your report for 7 years as far as paying off your credit cards thats good you want them to be low as possible for your debt to income utilization ie: your debt including all bills phone, gas, cable, water, electricity, current rent should not exceed 36% of your take home pay ie: you make 30k a year take home your bills shouldn't exceed 10k or $850 a month and the amount of house you can afford is 4x your take home pay in this case $120k house so to improve your chances of getting approved you should go for a mortgage for less then this amount.......as for credit score you will qualify for FHA which is 620 for most states and it only requires 3% down after adding in fees it adds to 5% of the total cost of the mortgage so for the 120k house it would be 6k you would need to bring to the table but you can lower this by asking the seller for CLOSING HELP this is very common and 99% of the time they will do it... you want to repost with specfic numbers for housing I can give you actually specfics but the formula holds for any house purchase and with a score of 684 your interest rate will be around 5.25% may be as low as 5% which is still extremely low given historical data and for every 10k you borrow you pay $60/month so on a 120k home loan your mortgage would $720 per month 

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Cher32

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Thank you so much for the information, very informative.

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