Annette Bui | Updated June 18, 2020 | Mortgage Programs 101
Collections are a significant dent to your credit scores and most creditors don't want you to know that there is a statute of limitations that allow for it to fall off after seven years. As long as you have not reached the creditor or initiated contact. However, the moment you do and they record this then it starts the clock over again. Anytime you make contact without the intent of paying off and resolving right away, it may impact your scores negatively. However, if the amount is below $2,000 and you are searching for a mortgage. Often, you can ignore it as long as your overall credit scores still qualify and there are no other bankruptcies or foreclosures that have not passed the waiting period.
Collections are a significant dent to your credit scores and most creditors don't want you to know that there is a statute of limitations that allow for it to fall off after seven years. As long as you have not reached the creditor or initiated contact. However, the moment you do and they record this then it starts the clock over again. Anytime you make contact without the intent of paying off and resolving right away, it may impact your scores negatively. However, if the amount is below $2,000 and you are searching for a mortgage. Often, you can ignore it as long as your overall credit scores still qualify and there are no other bankruptcies or foreclosures that have not passed the waiting period.
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