Credit Report Collection Items

Whether to pay off credit report collection items is a hot topic.  Should you or should you not pay off credit report collection items on your credit report? Well, that depends upon the type of loan product you want to obtain. On an fha loan, you do not need to pay off medical collections. On non medical collection items, as long as the item is over 3 years old and less than $5,000 than you should not have to pay them off.

Conventional Loans

On Conventional loans, unfortunately, we can’t give you a straight answer. We have to run your loan through the automated approval system. From there the system gives us an answers based on your fico scores, income, assets, and debt ratio. Obviously, the lower the loan to value ratio and the higher the assets the less likely you would have to pay off collection item. On the flip side, if you have very little money in savings, and a high debt to income,  you just might have to pay off that collection item.  However, prior to paying anything off, give us a call at 602-358-8717. We will run your loan through the automated approval system first so you can determine whether or not you want to payoff the collection item.

Next, have you recently been through a divorce? Was your spouse awarded the home or car? Did they default on their payments after your divorce? If yes, if you can provide a copy of your divorce decree then you should still be able to qualify for the new home mortgage loan even with late payments on your credit report. However, since loan program guidelines change constantly, make sure you call in to obtain current guidelines.

Prefer to fill out an online application versus a paper form?

No problem.  We can send you a link to fill out the loan application online.  To start the process call our office at 602-358-8717 and tell us you would like us to email you the link to fill out the online application.  It’s as easy as that.  If you aren’t comfortable filling out an online application, no problem.  We can email you the forms to be filled out, scanned, & sent back to our office.

We’ve been in business since 1998.  We are now serve the states of Arizona and Pennsylvia.  Experience does matter.  For more information go to our website at and click on contact us on the main page.  A loan officer will be more than happy to return your call and go over loan products with you.


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