Blemish on credit report - options?

[swbsam]

I had this First Premiere Bank card back when I was a freshman in college and was admittedly immature with it - $250 limit and I was making half assed payments and honestly lost track of the card (stupid, I know). I have other cards and have had a perfect payment history, but I forgot about the card, stopped received bills (though I've moved), and haven't gotten a call about it.

I just got a friendly reminder about the card from a mortgage company, letting me know that it's been in collections since 2002 and that the total due is now over $1,000. I check myfico monthly but should have been keeping track of my transunion report too, since this blemish doesn't appear on any other report.


Since i'm looking for a mortgage and have a down payment ready to go on a house (and am applying for FHA), what can I do to get this taken care of quickly? Would plunking down $1,000 really help to the ultra shady Arrow Financial Group? Should I dispute it (at least the amount due)? Should I look for a mortgage elsewhere?

 

[Beev]

What's the statute of limitations in your state?

 

[swbsam]

Originally posted by: Beev
What's the statute of limitations in your state?

I thought 8 years

 

[OCGuy]

Depending on what the automated underwriting says from Fannie or Freddie (or FHA if you are trying to do that), you may or may not have to pay it off.

If they do make you pay it, it can be done through escrow if you are in an escrow state. It will just be added to your closing costs.

 

[UsandThem]

You can get a free credit report from all three agencies once a year. It is a legit debt, and the collection agencies that buy this kind of debt are not the friendliest places to deal with.

If I were you, I would get their number and try to arrange some type of payoff. I wouldn't mention that you are buying a house and it is affecting your loan status. I would just tell them that you forgot about, and with your credit report showing what the original debt was, offer a lower payoff amount (original debt amount plus a an additional amount).

That item in collection, especially in today's credit market, will likely be a thorn in you side at any finance company.

Annual Credit Report

Also, I think when they passed laws concerning new bankruptcies, they extended out the time that debt could be on you credit report.

 

[rasczak]

if your credit score mens alot to you, then pay it off in full. if you do not pay it off in full and negotiate with the creditor for a lower payoff amount, you will get marked down on your credit report for not "paying as agreed" If it was your fault and lost track of the bill, then just pay it off (including all late charges). then request in writing, a reciept stating that the bill was paid infull as agreed and make sure they mark it on your credit report.

**edit** i've dealt with arrow financial as well (had my own credit problems at one point) and so long as you pay it off as agreed then you shouldn't have an issue with them.

 

[2Xtreme21]

The Fair Credit Reporting Act states that no one is able to hold any negatives against you that occurred more than 7 years ago, except bankruptcy which is 10 years.

Edit: Link

Q: How long can a consumer reporting company report negative information?

A: A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you?ve applied for more than $150,000 worth of credit or life insurance. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

 

[swbsam]

Originally posted by: Ocguy31
Depending on what the automated underwriting says from Fannie or Freddie (or FHA if you are trying to do that), you may or may not have to pay it off.

If they do make you pay it, it can be done through escrow if you are in an escrow state. It will just be added to your closing costs.

Country Wide just told me that I *have* to deal with it (looking for fha). Can I go with another company that has perhaps different standards?

With all the money that I have to spend now, $1,000 is a pain. I'll call them about a payment plan, but that doesn't help for the immediate now.

Thanks for any help.

 

[Adul]

dispute it if you have time to

 

[compuwiz1]

I don't believe your debt is collectible at this point. If you start paying it now, it resets the clock and your date of last activity becomes when you make the payment, effectively eliminating any statute of limitations that may have expired. Most states are 4-6 years and at 7 years it should come off the credit report.

My best advice is the ask the credit bureau to remove it. Dispute it based on time elapsed if it is at or over 7 years.

As for the mortgage, they may just want an explanation of what happened.

 

[OCGuy]

Originally posted by: swbsam

Originally posted by: Ocguy31
Depending on what the automated underwriting says from Fannie or Freddie (or FHA if you are trying to do that), you may or may not have to pay it off.

If they do make you pay it, it can be done through escrow if you are in an escrow state. It will just be added to your closing costs.

Country Wide just told me that I *have* to deal with it (looking for fha). Can I go with another company that has perhaps different standards?

With all the money that I have to spend now, $1,000 is a pain. I'll call them about a payment plan, but that doesn't help for the immediate now.

Thanks for any help.

Is the seller going to credit your closing costs? (In this market, it should be fairly easy to get a seller to do this). If so, the seller can actually "pay" it through escrow, as it will just be another cost, such as appraisal/title insurance/etc.

 

[swbsam]

Originally posted by: Ocguy31

Originally posted by: swbsam

Originally posted by: Ocguy31
Depending on what the automated underwriting says from Fannie or Freddie (or FHA if you are trying to do that), you may or may not have to pay it off.

If they do make you pay it, it can be done through escrow if you are in an escrow state. It will just be added to your closing costs.

Country Wide just told me that I *have* to deal with it (looking for fha). Can I go with another company that has perhaps different standards?

With all the money that I have to spend now, $1,000 is a pain. I'll call them about a payment plan, but that doesn't help for the immediate now.

Thanks for any help.

Is the seller going to credit your closing costs? (In this market, it should be fairly easy to get a seller to do this). If so, the seller can actually "pay" it through escrow, as it will just be another cost, such as appraisal/title insurance/etc.

Unfortunately, we're covering all closing costs. I'm calling Arrow on Monday and will offer a pay to remove - is it usually 50% of the total due?

 

[amdhunter]

Kiss your hopes of ever owning anything goodbye.

 

[boomhower]

FHA guidelines do not require past delinquent debts to be paid off. However, individual lenders can have their own requirements. Being that it is that old I would tell them to pound sand. It is so old it is barely hanging on to your report and should fall off any time now. If you pay it will reset the clock and it will hang around for another 7 years, actually making you worse off f.