Paying Off Old Medical Collections
I have a goal to buy a house within the next year. Almost everything on my credit report is a medical collection. Is is smart to pay off these collections? I keep getting advice from other people saying that medical collections do not matter but I think that they do. Any help would be appreciated. Thank you.
Reply from DebtCollectionAnswers.com:
You are correct in your understanding that medical collection accounts do matter when you try to get a loan. For purposes of the credit score, they are no different than any other type of collection accounts.
Unfortunately, however, paying off a collection account won't necessarily improve your credit scores. A paid collection account is also negative. However, payment collection accounts could keep you from being sued. in addition, a mortgage lender may require you to pay off the collection accounts before your loan can close.
It would be a good idea for you to talk with a mortgage loan officer now to find out what you need to do to be in the best position possible to get a loan when you are ready for one. You can contact a local mortgage professional or you can visit ArcLoan.com to give a free analysis of your situation.
We hope this helps!