How to deal with a negative item on your credit report.
I applied for a loan a few months ago, and it was turned down. I had good credit, so I was wondering "WTF!" So I checked my Experian credit report and I found that there was an item on collection. It was only $20, and chances are that the bill was accurate. So I called the collection agency (CA) up and offered to pay the bill. This is my recollection of the conversation:
CA: The full amount due is $45.
Me: Excuse me, but my credit report states that I owe only $20. Why do I have to pay $45?
CA: Because this includes collection fees.
Me: Then why does it say $20?
CA: Because that's how we are supposed to report it.
Me: Look, I didn't know about this bill, and I would have paid it if I did. So I just want to pay $20.
CA: That's fine. Its your credit report.
Me: What are you talking about?
CA: You can pay $20, but the entry is still going to stay on your credit report. Look, I dont want to argue with you anymore. You pay whatever you want and I will decide whether to let this stay on your credit report. Dont call back here anymore. (Hangs up.)
Man...that pissed me off. That day, I learned never to talk to a CA in person. I spend a better part of the week learning about CAs and credit reports. To make a long story short, I sent them a check for $45 with a letter stating that by cashing the check, they would agree to delete the entry from my credit report. They accepted the check and a few days later, the entry was gone.
On that note, I thought I should share some of the things I have learned about how to deal with these guys and keep your credit clean. I should point out that CAs are different and some are more reasonable than others. Also, this is anectodal evidence. In other words, results may vary.
1. MAKE SURE THAT THE DEBT IS ACCURATE - If you know for sure that the debt is not accurate, then you will have to get in touch with the original creditor. Your credit report should state who the creditor is. If you are able to get in touch with the original creditor, then find out the circumstances surrounding the bill and explain that you have been billed erroneously. If the creditor agrees that the bill is not accurate, GET THIS IN WRITING. Let me repeat, GET THIS IN WRITING. If they wont commit to this, then have them agree to delete the entry (or have them call the CA to inform them that the debt is inaccurate.)
2. DONT THINK EVERYTHING WILL BE SETTLED OVERNIGHT - If the amount in dispute is small, chances are that you will be able to settle this matter in a week or two. But be prepared to be patient, particularly if the creditor or CA is resilient. In the meantime, make plans to find a reliable co-signer.
3. NEGOTIATE - If the bill is accurate, then you will have to pay it in full, including collection fees. Unless you owe a particularly large amount, the creditor or CA is not likely to negotiate a lower payment. However, make sure that payment is conditioned upon deletion of any negative entry from your credit report and that a PAID entry is not acceptable. Once again, be patient.
I'll be back with more after I get some sleep.
CA: The full amount due is $45.
Me: Excuse me, but my credit report states that I owe only $20. Why do I have to pay $45?
CA: Because this includes collection fees.
Me: Then why does it say $20?
CA: Because that's how we are supposed to report it.
Me: Look, I didn't know about this bill, and I would have paid it if I did. So I just want to pay $20.
CA: That's fine. Its your credit report.
Me: What are you talking about?
CA: You can pay $20, but the entry is still going to stay on your credit report. Look, I dont want to argue with you anymore. You pay whatever you want and I will decide whether to let this stay on your credit report. Dont call back here anymore. (Hangs up.)
Man...that pissed me off. That day, I learned never to talk to a CA in person. I spend a better part of the week learning about CAs and credit reports. To make a long story short, I sent them a check for $45 with a letter stating that by cashing the check, they would agree to delete the entry from my credit report. They accepted the check and a few days later, the entry was gone.
On that note, I thought I should share some of the things I have learned about how to deal with these guys and keep your credit clean. I should point out that CAs are different and some are more reasonable than others. Also, this is anectodal evidence. In other words, results may vary.
1. MAKE SURE THAT THE DEBT IS ACCURATE - If you know for sure that the debt is not accurate, then you will have to get in touch with the original creditor. Your credit report should state who the creditor is. If you are able to get in touch with the original creditor, then find out the circumstances surrounding the bill and explain that you have been billed erroneously. If the creditor agrees that the bill is not accurate, GET THIS IN WRITING. Let me repeat, GET THIS IN WRITING. If they wont commit to this, then have them agree to delete the entry (or have them call the CA to inform them that the debt is inaccurate.)
2. DONT THINK EVERYTHING WILL BE SETTLED OVERNIGHT - If the amount in dispute is small, chances are that you will be able to settle this matter in a week or two. But be prepared to be patient, particularly if the creditor or CA is resilient. In the meantime, make plans to find a reliable co-signer.
3. NEGOTIATE - If the bill is accurate, then you will have to pay it in full, including collection fees. Unless you owe a particularly large amount, the creditor or CA is not likely to negotiate a lower payment. However, make sure that payment is conditioned upon deletion of any negative entry from your credit report and that a PAID entry is not acceptable. Once again, be patient.
I'll be back with more after I get some sleep.
I couldn't apply for a credit card coz I've got no Credit History! You think that will be good, but it ain't! So I assume you got the loan?
Posted by
SimplyMas |
2:09 AM
They make a big fuss just because of few bucks? What's up with that?
Posted by
Prince Romp |
8:07 AM