Author Topic: Getting debt collectors to remove negative credit marks  (Read 6283 times)

Aushin

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Getting debt collectors to remove negative credit marks
« on: August 29, 2012, 08:44:19 AM »
I got a letter a few days ago from the collection agency that is now trying to collect from me for what (in my opinion) was a bogus medical charge from before I had insurance or a job in 2009.

It was some sort of "Hey we'll let you settle for 1/2 the amount" thing with a lot of legalese and dates written on it.

Not coincidentally, I checked in on my credit score at CreditKarma and it recently dropped about 100 points from a fresh negative mark applied by the same collectors. 

Is there some way to get them to remove the mark in return for payment?  I made a topic a few months ago about my various financial issues, and someone mentioned something like this. 

ShavinItForLater

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Re: Getting debt collectors to remove negative credit marks
« Reply #1 on: August 29, 2012, 09:44:01 AM »
I think it's possible in some cases to negotiate that, but I think you're on really shaky ground even if you get them to agree to it.  I would be surprised if they would put something like that in writing, because they would essentially be saying in writing that they are agreeing to break the credit reporting rules they are supposed to follow. 

Even if you *had* it in writing, if they reneged later you would not really have any recourse, because the credit reporting agencies never agreed to it and I think what you'd be asking them to do might even be considered illegal.

Assuming that doesn't stop you, the actual mechanism to get it removed I believe is to dispute it with each of the credit reporting agencies, and then the agencies would contact the collection agency to verify the debt--if they don't verify it then within 30 days the agencies are supposed to remove it from your report.  If they do verify it, then it stays.  If they felt like popping it back on your credit report 2 years from now they could probably do that too.

I think your best bet would be to dispute the validity of it with the medical provider, and if you can negotiate that with them, get them to take back the debt from the collector.  From what I understand, face to face meetings with medical providers or their patient advocate group is the most likely route for success. 

If not, then I guess you could try the above, but you're not on solid legal grounds to the best of my understanding (I'm not a lawyer).  What you can legitimately request is that they report the debt as settled in full for your partial payment--and if you did that, I'd definitely get that in writing before they get a penny from you.

Aushin

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Re: Getting debt collectors to remove negative credit marks
« Reply #2 on: August 29, 2012, 11:23:30 AM »
Am I essentially screwed?  It seems like even if I pay them I will have terrible credit for what are probably going to be the most important years for me to have good credit (I am 25 right now).


EDIT: And, by the way, I find it insanely unjust.  It's the only thing in my life so far that I haven't been 100% on time with in paying and my credit score is under 600 from it.

EDIT 2: I called the original biller and they informed me that they will not (do not) buy back old debts once they are sold to collection agencies.  My financial life is destined to be summarized by an 800 dollar medical bill from when I was unemployed, it seems.
« Last Edit: August 29, 2012, 11:48:59 AM by Aushin »

ShavinItForLater

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Re: Getting debt collectors to remove negative credit marks
« Reply #3 on: August 29, 2012, 12:06:20 PM »
Take a deep breath.  I don't think you're screwed, I think things seem a lot worse to you right now than they really are.

First, your credit score will likely improve just by settling the debt and having them show the debt as "settled in full"--that is not as bad as an outstanding bad debt.  Second, as best I understand it, the "dent" in your credit from this will only affect your credit score in any significant way for maybe 2-3 years, and assuming you don't have any other late pays going forward, your score will steadily increase over that time.  By way of example, I personally have a medical debt that went to collections (I just lost track of the bill), I paid it off four years ago, it still shows up on my credit report, and my credit score according to Quizzle is 794.

There are also other ways to raise your credit score.  Do you have other credit cards, loans, etc. that are showing up as current?  How much of your available credit are you using?  One way to increase your score is to keep your % of credit utilization low (meaning you have the highest possible credit limits, and you are not using very much of it).  This contributes greatly to my current high credit score.

Finally, having a high credit score is not a prerequisite for financial success.  It doesn't keep you from saving money, investing, paying off debts, or a host of other things.  You can find landlords that will rent to you, and if you can demonstrate that you're responsible financially other than this one thing, I think you could even get a mortgate through a place that will do manual underwriting and not just blindly screen based on credit score.  Even if you took a hit on interest rate short term, you could likely refinance once your score comes up.

Aushin

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Re: Getting debt collectors to remove negative credit marks
« Reply #4 on: August 29, 2012, 12:36:49 PM »
I don't have any credit cards, so I'm sure that's helping to kill me.  Thanks for calming me down haha

I guess I'll...pay it, then.

Another Reader

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Re: Getting debt collectors to remove negative credit marks
« Reply #5 on: August 29, 2012, 01:08:29 PM »
Hi Aushin - good to see you back! 

I would try to settle this for a much lower amount.  You might offer them $200 and tell them you won't settle unless you get the account marked "paid as agreed" with the credit reporting agencies.  And you won't send them a dime until you get the agreement in writing.  If they renege, you send a copy of the letter to the credit bureaus.

The other option is to ask in writing for the original document with your signature on it, proving you actually owe the money.  If they cannot prove you owe the money, the credit reporting agencies should remove the item if you dispute it.  Send a copy of your demand letter and the certified mail receipt to the credit bureaus with the dispute letter.

How are things going with your mom's house?  Did you get the title issue resolved with your former stepfather?

Aushin

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Re: Getting debt collectors to remove negative credit marks
« Reply #6 on: August 29, 2012, 01:56:44 PM »
We've been calling her former divorce lawyer for over a month and keep getting answering machines and promises of future clarification.  Today they told us they don't have the manpower to find the paperwork and asked if we could fax them our copy.  So we're faxing that today.  I'm 99% sure they're both on the title because I checked with our county's tax people. 

Part of me wants to buy the house for what she owes on it and then pay her to move out lol (long story, this).

Thanks for checking in.  I haven't had a big update for my thread in a while.  Replaced 140 a month TV with 5 a month TV, don't take many guitar lessons anymore (sad about this, I'm obsessed with learning more music currently), have a carpool group.  Kept the expensive iPhone plan, so my bristles are still pretty adolescent.  Currently have $1000 saved toward a car replacement.

What I really could use is a fat raise!


Another Reader

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Re: Getting debt collectors to remove negative credit marks
« Reply #7 on: August 29, 2012, 02:05:40 PM »
Congratulations on the $1,000 in savings!  The carpool and the reduction in television expenses are probably responsible for a big chunk of that.  How much are you able to put away a month now?

With the pressure from your mom and sister, the phone is going to be a bigger challenge.  Is your mom doing any more house cleaning jobs?  Is the mortgage being paid on time?  Getting the mortgage paid timely will go a long way to assuaging your former stepfather's fears and will buy you some time to get this mess resolved.

Looking forward to more updates on your progress!

Aushin

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Re: Getting debt collectors to remove negative credit marks
« Reply #8 on: August 30, 2012, 06:43:27 AM »
She had what I could only call a dream job last week.  Every night, from 11-2AM, clean up for some yogurt place.  100 a night.  She lost it in three days, though I don't think it was for the quality of her work.  Probably was just too good to be true.  Craiglist isn't really panning out other than that (she got a phone call because of the ad). 

I think I can save about 700 a month, but this past month I was running around for orchestra practice and spent much more than I normally would.  I also needed to replace something on the Neon that cost 400 dollars (I can't remember what it was because my car vocab sucks, it allowed for my transmission fluid to leak out), so I WOULD have had 1400 ready to go.

The mortgage, after this month, will have been paid 4 consecutive months.

Another Reader

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Re: Getting debt collectors to remove negative credit marks
« Reply #9 on: August 31, 2012, 10:04:04 AM »
Lots of improvements!

You are probably going to have to put more pressure on mom to find work and drop the cell phone plan.  Also, mom working sets a better example for your sister.  But YOU are doing very well!