Trying to get mortgage approval, NEED ADVICE!?

Deal Score0

Before I explain, I want to stress that I DO NOT want any type of lecturing, and do not want to be criticized about credit scores.
My husband and I have been trying to get approved for an FHA home loan for about a month now. We have been working to improve our credit for the past 2 years. We have about $ 6000 saved up for a down payment. We have been working with a loan officer. My husbands middle credit score is about 610, loan officer suggested that we pay off 2 old collections (they are about 5 years old) he said if we paid them, it would increase our credit score to where it needs to be, and he would pretty much guarantee approval. So we paid both collections in full. Now I’m getting really worried after reading on several websites that paying old debts actually does the opposite to credit scores. He has been a loan officer for PNC bank for 20 years, and we were trusting his advice. Has anyone in the mortgage business have any advice??? Anything would be greatly appreciated.
Also I wanted to mention that the credit bureaus have already marked these debts as “paid in full”

  1. Reply
    April 29, 2011 at 9:12 pm

    Paying off the collections will help you.
    FHA does not go by the scores, like many major mortgage lenders.
    They view your reports in detail and make their own decisions.
    The fico has a major flaw – when you pay off a defaulted account, the score does not improve, since the rating system is based on history.

    Trust me FHA will review your reports and see these items paid.
    They use their own rating system and don’t worship the fico.
    That’s why you see some people with horrendous scores getting FHA loans – they cleaned up their credit reports.
    Give the old creditor 30 days to update your credit reports.
    Enjoy your new home.

    Do not make any new loans 18 months before buying your home, and do not open any credit cards 6 months before your purchase. If you open a credit card – pay in full each month. Carring balances can reduce credit.

  2. Reply
    April 29, 2011 at 9:21 pm

    Pay off all your bills so that you can have a lower credit score.

  3. Reply
    April 29, 2011 at 9:51 pm

    yes when paying off old postings such as medical collections and such can absolutely lower your scores. I have seen this many many times. The best way to get his score up is to pay down any revolving debt he has to very low balance but not closing the account. If he has no revolving debt and you do then make him a co maker on the credit card not just an authorized user but a co signer on the debt. Get a letter from the card company with this fact and have the loan officer send it to the company they pull credit from and get the file re scored and the scores will come up a lot. Now will it be enough that depends on how much it dropped when the collection reported paid. See old dates reported are now new posting in what was already a negative posting
    I am a mortgage banker in TN

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