Sam,

You really should post your question separately, not part of Amber's Q&A.
Texas is a community property state. Anything you do or your husband does will affect each other, since while married, your credit is joint. Your separate property and his separate property may not be altered by marriage, but a negative credit event on the other spouse will be charged as a derogatory for both.

Before closing or opening any credit account, consult your loan officer.
A long-standing open account with good payment history, even though the balance may be high, is a plus. Closing it will lower your score. Opening a brand new account will lower your score too, because the account does not have a history of good payments yet.
Having the creditor close your account is worse news.
Your goal should be to have all accounts with less than 30% balances on them, and for all of them to be paid on time with no lates. If you want to close any accounts, close newer ones, not older ones. A better approach is to leave the account in place, charge a small amount regularly so the creditor does not close it, and pay it on time. This will maximize your score, unless you have over about 9 or 10 accounts of that type.

The optimal strategy is to have 2-4 credit cards (up to about 7), not 12, and to pay them as agreed, while maintaining the balances below 30% of maximum, but at most below 90%. 100% of credit line is bad on revolving credit. A HELOC is not truly a line of credit and the rules are different for maxing it out.

Divorced people often run into the problem that accounts opened while they were married are now delinquent. The spouse did not pay on time or refuses to pay. This can still affect the other (ex-)spouse, because it is a joint account. Unfortunately, the only way to separate the other spouse from you is to have the account closed and re-opened under the name of the divorced spouse who wants to keep it.
Frequently, creditors won't let you close an account with a balance showing. So, "his" Sears card has $200 on it but it's on your credit report -- pay it off, and then close it. It's safer than letting him miss a payment and you're hurt.

In Texas it is not all that difficult to clear things up in a properly drafted decree followed by account closures, but most people just let the old account sit there accumulating lates. This often happens on car notes. Get the agreement of whose property it is in writing, get it in the decree and re-finance if necessary to sever the spouse from the account. (Yes, re-financing is the only way sometimes to get a spouse off an account, and NO, you often can't just close it, you have to pay it to zero and then close it or transfer it to the other spouse or to your name alone.)

Not divorced, and not thinking about it? This is the "for worse" they talk about.

Without my knowledge, my husband ran up a $25,000 credit card bill. When I tried to use the card and it kept being declined, I called the credit card company. When they told me about the amount I owed, I reported a stolen card and said CLOSE the ACCOUNT. However, I then learned that the address where the bills were sent were to my husbands work address. Closing this account made my score drop 200 points. My score went from over 800 to the 600s. It would have been better to have paid the account off little by little instead of paying the total amount and closing the account.
I am still furious with my husband for ruining my credit score. The people at the credit bureau said the only way I can raise my score is to submit a fraud report against him. I am not willing to do that. Also, the company that issued the credit card has been sold so they can not trace back any phone calls or records.
Any advice from anyone?

Hard to say it depends on how old they are.

Thank yall for all your answers, for some reason our score went up 20 points before the collections that we paid even went on our score. So we are fine in that area, now were just waiting for the loan to be approved, the only thing our loan officer said my hurt us is the repo. But many ppl told me that ppl have way more on there credit and get loans so im just keeping my fingers crossed

The bad news is that the people who know aren't saying.
Credit scoring is a dark secret, a secret formula, a trade secret. Say you had a collection from 3 years ago with no activity, and you called them to negotiate paying it off partially or fully. To your surprise, whether you paid or not, your credit score drops the next day, simply because the last activity date on the item went from 36 months to 0 months.
You can pay off the whole amount and maybe 2 of the bureaus lower you and other doesn't change. But, two months later all 3 raise your score. It just can't be predicted, especially as to when in the short term what paying off collections will do. Primarily, things happening currently are weighted more heavily than old items.
If you have the cash to pay off collections, ask your loan officer about doing a rapid re-score after you pay. It's a technique to get your score up quickly. Getting over 600 is a good idea.
Closing accounts can hurt you as much as opening them. True. If you have an old Mastercard from 1991 that you have paid on time because it doesn't have but a $400 credit line anyway, KEEP IT. That old credit line is pumping up your score.
A new credit line has NO HISTORY of payment. That is why opening new trade lines brings down your score. Your capacity to repay has not changed, but not having a history of good payments on new accounts is interpreted as a risky unknown. This is also why inquiries bring down your score, because they are potentially new trade lines.
Talk to your loan officer about how to deal with your accounts. My guess is it will take 45 days for the paid collections to appear on all 3 bureaus and yes, probably a 20 point rise. But you can try the simulator and see what it estimates for your increase.

Amber,
When they say it may bring down your score they are talking about when someone has a large credit line on an account, when there are a lot of accounts with a large credit line open but paid off, with a large amount of credit available , that brings down your score. The reason for this is you can go our and run up a lot of bills.
When you were told to pay off some of your bills they meant some of the ones for Hospitals and so forth, some of the ones you have been late on in the past, and other frivolous accounts. If you have run up large amounts on Gas cards. Also if you have too many Visa and Master Cards, pay off a couple and close the accounts.
If you just let the truck go back there may be nothing you can do about it the FICO score alone does not get you the house.
Margaret

Not all lenders have the same minimum FICO scores for qualifying. Ask around.
Also, I have had countless conversations with people who were told by their loan officer to pay off collections....to only have that lower their scores.
I am not saying that this will happen to you..... but it could. Your lender may have access to a FICO score simulator themselves..... if they used that BEFORE telling you to pay collections then I wouldn't worry. If they did not, I would get a second opinion.
Good luck!!

my lender told us we needed 20 more points and that paying our collections should do that, I figured for the most part if she said it should, then it most likely will. He did have real good credit, then he let a truck go back, which made him 20 points under what FHA will approve.

Amber, I am not aware of a new law being passed that has changed Fair Isaac Company's (FICO) scoring model. What do congressmen know about credit scores?
There is a FICO Simulator at MyFICO.com. This is also the only place for a consumer to purchase their FICO score. All of the other sites are not using the same FICO scoring model that lenders use.
Try the simulator and let us know what happens....
Is your lender telling you to raise your scores? Or do you just have a level that you feel comforable?

Thanks to all these answers, I have noticed a couple of people saying it may bring down my score. I have read that a new law has passed stating that if collections are paid off it will bring up your score b/c its unfair to bring it down. I dont know if this is true though

Naima,

I followed what I am suggesting personally and have increased my credit score substantially. I did it because of the advice of people who are getting paid lots of money to help individuals increase their scores. The key is maintaining the accounts. The balances should either always be paid off each month or keep the balance to 30% or below the credit limit.

Opening more accounts (Again, A LOT MORE), is two-fold. They could save on finance charges and help their credit score, so I don't understand why you're saying not to open more accounts....


Amber,

My suggestion came from the fact that I was in the same situation and seeked the help of a professional - it is not coming from being a Realtor. Since you did not get the advice I'm giving you directly from a professional, please ask someon who specializes in credit repair. There are a lot of them that gives free initial consultation without any sort of obligations...

Good Luck!

Amber, no matter what you do, DO NOT open any more accounts!!!

Depending on how it is listed.... it could hurt as much as it helps. Even paid, it will still be a collection. And after you pay it, the date of last activity will be very recent. Sometimes it is best to leave it alone until after you get the mortgage. Now, if you can negotiate a 'pay for delete' situation, you could very well help yourself.
Is there any other thing you can do to get those points? Paying down a revolving account tends to be the fastest way to gain a few points.

Good luck!!

I owned a credit repair company for 10 years lectured to 1000's. It is undetermine how much your credit score will move paying on the debt owed. If it is a debt collection company it could lower your credit scores by updating your account status. If the debt is OVER 2 years old less of impact.... If LESS than 2 years it will drop each account by 30 points on your credit report.

RECOMMEND: obtain a letter from the debt collector you have paid the account see if collector will delete it from your credit report that would increase your scores. However I would not pay unless you received a letter in writing from the collector. Collectors will take your money never update your credit report that you even paid. still show a balance owed to their company OR sell your account to a sister company

If the debt is over 5 years old it has little impact on your overall credit scores

Based on the age of the debt you might be able to apply that towards other debt you owe pay those balances off in full DONT CLOSE THE ACCOUNT it can increase your scores

DISCLAIMER: My statements only based your information provided without seeing any credit reports general opinion only. You need to do what you feel is your best interest.
http://www.lynn911.com http://www.homes-for-sale-dallas.com

The best thing you can do is pay them off, but don't cancel the account. Keep the account open but rip the cards up or destroy them, or give them to someone you trust. Closing an account can cost you points in the long run. You want to establish that you are a good risk. :)

I was told by the lender that I work closely with that it will certainly bring up your credit score but they can only estimate by how much.

I was also told that not only are you not supposed to close your credit card accounts, but apply for A LOT more (do this online all at the same night) and distribute your existing balance so that all the balances are 30% or below each of the credit limits. Not only will this help your credit score, but it will also lower your interest rates - a lot of credit cards have 0% interest rates for a year or 18 months. Make sure you read the terms though like balance transfer fees, etc. Make sure even after the balance transfer fees, you will still come out ahead.

Where's Azle? I can refer you to a realtor in your area, call me or email me.

Good luck!

Depending on what the collection on your report it, you can save money by paying it off yourself. If you have a copy of your credit report, the contact for that company will be on there and you can contact them and make arrangements for payment. You just are never sure how many points will be credited after you pay them off, it could be 10 points, 50 or 20... there is no rules.

Naima