I have about $6,000 of very old debt. It went into collections about 3 years ago when I was in college.
Today I have a good job, and I am thinking about the future. I am now interested in improving my credit because I want to try and buy a house in the future. I am hoping to try and get a mortgage at the end of this year, or perhaps some time next year. However this timing is flexible.
For the past few years I have been working on timely payments, creating new credit, and slowly improving my credit. So my credit score is now up to 628 (based on my free credit report).
I want to get a mortgage, but I am not sure what to do about this old debt. No one calls me about this debt anymore. I used to receive settlement offers for about 30% of the owed value. But I don't want to ruin my chances of getting a mortgage in the future by making the wrong decision.
So I wanted to know, roughly, how each of these decisions would affect my chance of getting a good mortgage:
Ignore the old debt.
Settle the debt for 30% of its value.
Payback the value in full.