VA Drama

My husband and I have been approved for a VA loan.  Today I got a letter from a collection agency. 

I called and paid the bill – it was from two years ago.  They said it had not been reported to the credit bureaus. 

If by chance it has been reported, would that prevent the loan from going through even if I show I paid it?  Will they run another credit report prior to closing? 

We close in two weeks.  Thanks.

Connie

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Hi Connie,

No worries.

The credit report that was run may be used for up to 120 days for VA loans.  Also, for grins, here is what the VA Lenders Handbook says about collections:

Collections:  Isolated collection accounts do not necessarily have to be paid off as a condition for loan approval.  For example, a credit report may show numerous satisfactory accounts and one or two unpaid medical (or other) collections.  In such instances, while it would be preferable to have collections paid, it would not necessarily be a requirement for loan approval.  However, collection accounts must be considered part of the borrower’s overall credit history and unpaid collection accounts should be considered open, recent credit.  Borrowers with a history of collection accounts should have reestablished satisfactory credit (see previous paragraph) in order to be considered a satisfactory credit risk. 

Thanks for the questions and looks to me like you’ll be buying a house in two weeks.

Paul

(source= warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)