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Can I settle the accounts for less than the amount owed?

Home values in the town where I live are going up and I'm considering buying a house. My credit is not very good and I'm trying to re-pay some collection accounts. Can I “settle” the accounts for less than the amount owed? -Kim

Dear Kim,

If the collection agency does not agree to have the account shown as "paid in full" on your credit bureau file, you may face problems securing a mortgage loan. Check with your mortgage company to see how they will look at a settlement notation on your credit bureau file. Many mortgage companies will require you to pay the entire balance in full before they will consider you for a mortgage loan.

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