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Question By
chrissychic70

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Will a settled collections account hurt my score?
I found a collection account on my report from 5 years ago and need it paid off to buy a house ASAP. I was offered a lower settlement amount. Will taking this settlement bring my score down or effect it negatively?

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If the account hasn't updated in a while then a payment may cause a ding to your credit. As far as "paid" vs. "settled" it doesn't matter either way to the scoring systems. Will it matter to future lenders, I don't know. Either way, no matter what happens you will need to get the collection closed to be able to get a mortgage. If it were me and I could save a decent amount of money with the settlement I would settle. Before you get ready to apply for a mortgage spend some time researching for lenient mortgage lenders and have a list ready to go in case you are not approved by the first one.

Top Contributor
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Also know that lenders won't use the scores that you get here, they will use FICO and probably a mortgage version. If needed, push the purchase out a little while until you can improve things to a good level.

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