Credit Score On Conventional Loan

Recently I pulled credit for one of my customers who would have had perfect credit if it wasn’t for a $70 medical collection. The borrower had a middle credit score of 678. Due to this below average score, he was not going to get the lowest interest rate on a conventional loan.

I recommended he pay off the collection and have him provide us with proof that we could upload to the bureaus to show the collection was satisfied. His credit score was then recalculated. His credit score went from 678 to a score of 791. As a result, he received a .375 lower interest rate.

The bottom line is by paying off the collection and re-pulling the credit, my customer lowered his payment $55.37 per month and will save $664 every year he has the mortgage. All that money will be saved as a result of paying off a $70 collection. Needless to say, my borrower is thrilled 🙂


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