Credit impacts mortgage refi
I'm attempting to refinance my mortgage and need to raise my score a few points to meet the required minimum. I was unemployed and had a credit card that was charged off in 2015 but the credit card company is still reporting a past due balance of $4K. The loan officer suggested negotiating a settlement to reduce balance under $2K to help raise my credit scores. In your opinion, what impact will the settlement have on my credit? Thank you!
Terry Says
If the card was already "charged off" it means the amount was sold to a collection agency, that probably hounded you for money. Even if you pay the collection agency, it won't impact the chargeoff on your credit report. And I find it highly unlikely that the company that charged off the balance will make an adjustment that will impact your credit. And I'm not sure that paying part of the balance will impact your score. I'd suggest contacting another refinancing source -- either Quicken mortgage or Guaranteed Rate. See what they say about the impact of the existing charge-off. I'm not sure your loan officer knows what he is talking about in a practical sense.
