I want to preface this article by saying that any of bad advice I’ve seen given by mortgage brokers was purely unintentional.  Brokers know what they need to see in order to get you a loan approval, but that doesn't mean they know the best way of getting it done.

The most common scenario are consumers with marginal credit, typically with credit scores floating around a 640. The culprits are usually older, unpaid collection(s) and it’s likely the broker may advise paying them off in order to obtain the loan.

On the surface it sounds like sound advice, but paying off old debts may have an opposite, negative effect to your credit scores. Here’s why…

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