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Question By
keckermann

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Old Collections Impacting SCORE Heavily, What Can I Do to Increase?
I have several OLD collections and an investment property foreclosure from 2007-2008 that are falling off in the coming 6-10 months (if the creditors do not re-age them as they have been for years). My wife and I are needing to qualify for a construction loan and the parameters with local banks are tight to say the least. I have 5+ years perfect pay history with numerous revolving accounts with balances below 10%. Unfortunately we sold our primary home recently in preparation to build which had a 9+ year mortgage with perfect payments and I noticed my score drop significantly. True pulls on the mortgage side were 595-615 and the monitoring models through FICO, CK, CCT, WM, etc run 595-635. Oddly, the score from my credit union on EQ auto side recently was a 666. My wife is a perfect 800+ so her credit is great. After these adverse accounts fall off, I will have a 100% perfect 7-year credit profile too.

I need to be a strong 680+, hopefully a 720+ for the best rates. Should I expect to see 40-50 point increases when these collections "fall off" and the mortgage foreclosure falls off in the coming months?

The collections are all revolving credit based and I have opened multiple new revolving and installment (both retail and auto) accounts that have had perfect pay history since inception, some over 5 years ago. No blemishes are on my report since early 2009 on ANY ACCOUNT except the re-aging and frequent re-selling of these collections from 2007-2008. Most recently, a collection popped up in February '14 which stems from one of these "OLD" accounts. It likely knocked down any progress I had made. Looking for a little advice on strategy or to determine if this is just a waiting game.

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The older a negative account is, the less damage it does.  Nobody can say for sure how many points your score will increase once they drop off, but I doubt that it will be 40-50 points.  You can build up your good credit to offset the bad.  Do you have any open credit cards right now?  If so, keep the balances on them between 1-3% of the credit limits and your score will increase.  If the balances are already higher than that, then pay them down to increase your score. If you want the negative accounts off quicker, write letters to all three bureaus (never do it online) and ask them to "verify" the accounts (don't lie and say they aren't yours, just ask them to verify them).  You may be surprised how many will fall off early.   Best of luck!!

Reply by
keckermann

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Thanks for the reply, I have since recognized the active collection from '14 but related to an '09 unknown account be removed from all 3 reports. In addition, the foreclosure was removed from all 3 reports as of last week. I have the cards in check but will pay them down further. They are currently >10%. I am actively seeking verification of the debts still reporting and these are all accounts that experienced negative action from '07-08. The next 6 months shall see these removed. Model scores as of last week were EX-667, EQ-714, TU-638. I'm pretty sure I can get there but it may just take a bit more time. Realistic mortgage scores may already be worthy of qualification. I appreciate the input.

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