Question About Mortgage Application and Credit Report (loan, credit card, loan)

[LynnHarris]

My son paid off three delinquent credit card balances in October 2011, which had previously been sent to a collection agency. Although he has paid all three of them in full, the information still shows on his credit report. He sent each payment by certified mail and still has the receipts verifying that they were all received. In addition, he also has verification copies that all three money orders were cashed. (He has also initiated an investigation with all three credit bureaus).


My question: Although the information is still on his credit report, will this supporting documentation be enough to show a mortgage broker/bank that these expenses have been legally paid off? In the meantime, he has started rebuilding his credit by paying off a financed car and a personal loan – which included no late payments.


Thanks in advance for any assistance.

[VictorBurek]

Lenders today require that the credit report be updated reflecting that the accounts have been paid. Also, if any account is in dispute status, that must be satisfied before new loan closes. Meaning the dispute must be removed from credit and a new report pulled to see what impact on fico scores.

[PG2005]

On that note, how long does it take for your credit report to show a loan is paid off?

[Debsi]

Credit is reported on the last day of the month, so your credit report should show a paid off loan the following month.