Re: Low credit score mortgage
Mortgage companies look at much more than just your score, although a minimum score is a must to even them consider you. All the negative items on your report makes it impossible to get approved.
A mortgage company will want to see all negative collection items paid off. No exceptions!
So even if it doesn’t raise your score, the mortgage company will review all your reports from the 3 major credit bureaus, notice the debts as paid, and act accordingly.
You will need to either pay of these debts in full to have them removed from your report, or settle with the collector. However, “settled” looks much less appealing to lenders than “paid in full”.
Also, remember that collection agencies tend to sue you right before the statute of limitations is up. They can garnish wages and go after your assets such as your checking/savings.
It is a myth that debts simply “fall off”. Perhaps small ones around ~$200, but collection agencies are not in the habit of just letting $2K go by.