Raising score for VA Loan

[NCTuskie]

I'm wanting to get approval for a VA Loan. My scores run from 580 to 600. I spoke with Veterans United a few days ago, and Quicken Loans about three months ago. QL advised me to get my collections off my report. Presently I have 3 collections on my report for $875, $420, and $81. I plan on doing a pay for delete on all of them. VU advised me to pay down my credit cards to 30-50% of their limit. One card has $3000 and the other is my overdraft with a $500. VU said paying the cards would have more of a positive influence on my credit score than my collections, and bring my score up. VU said everything else looks good on my credit report.

I think with income taxes I can do one option or some of both options. Just not sure the best way to spend my money. Any suggestions?

[willingtocope]

Pay the collections. Mortgage underwriters do not want to see anything that might wind up in court with a lien against the property.

But...do not deal with any CAs. Call the OCs and pay them directly. They will probably want a "paid in full" for a PFD, but even if they won't delete, you will probably get your VA loan.

The advice from VU is directed at improving your FICO sucker score ("utilization"). The FICO mortgage used different criteria...

[Denita]

Originally Posted by willingtocope

Pay the collections. Mortgage underwriters do not want to see anything that might wind up in court with a lien against the property.

But...do not deal with any CAs. Call the OCs and pay them directly. They will probably want a "paid in full" for a PFD, but even if they won't delete, you will probably get your VA loan.

The advice from VU is directed at improving your FICO sucker score ("utilization"). The FICO mortgage used different criteria...

Listen to Willingtocope...he is exactly right about the mortgage underwriters and collections.

Your score should get a big boost if you do manage to get the PFD even if you have to pay in full, it will be worth it. Collections drop a score like a rock. You will actually be taking care of two issues; getting rid of the collections and raising your score. If you still want to decrease your utilization, you can do that after you see your results from the deletion of the collection accts.

[NCTuskie]

I called one of the original creditors, Credit One and they wouldn't do it. Instead they offered a courtesy deletion of their tradeline with a letter from the collection agency that the balance is paid in full. I haven't talked to Sprint. And the other is a medical bill.

[Denita]

Originally Posted by NCTuskie

I called one of the original creditors, Credit One and they wouldn't do it. Instead they offered a courtesy deletion of their tradeline with a letter from the collection agency that the balance is paid in full. I haven't talked to Sprint. And the other is a medical bill.

Is that a current collection? If so, take the offer IMO.

[NCTuskie]

I plan on doing it. Aside from the collections, Credit One it is the only negative on my report.

[Denita]

Get it in writing first before you pay it, just in case.

[veteransadvocate]

I would listen to Veterans United on this one and pay down the cards.