Hello Creditnet, I've been trying to build credit for the past year, and all of my credit card applications were denied--even a bank's secured card where I offered $1000 as collateral. I requested a credit report from a CRA (Experian), and I only found one item in my history. The details are as follows: Emergency Room Bill Type: Collection Terms: 1 Month Date opened: Nov 2012 First reported: Feb 2013 Date of status: Jul 2013 Credit Limit: $2742 Status: Paid in settlement. Account paid in full for less than full balance. What do you suggest my next steps be? This will stay in my history until Feb 2019. What bugs me is that it has it listed as "Account paid in full for less than full balance". Is it possible to have this removed from my history without paying anything additional? I have not asked to have the debt validated yet, so I plan on doing that first. If proof is provided that the debit is valid, I then plan on either paying for deletion or looking into some sort of non-disclosure agreement with them. What I fear most is opening up a door to be contacted by the CA about paying debts. What do you all suggest as the best course of action in this situation? Thank you all in advance for your help and suggestions!
Presumably the CA is reporting. Is the tradeline correctly labeled as a MEDICAL DEBT? How that is flagged differs on each credit report. IF a third-party pulls your report, the name of the original creditor is essentially required to be scrubbed and replaced with a notation that it's a medical debt. If it is not properly flagged as a medical debt, you could go after the OC, CA & CRA for violating both HIPPA and FCRA, and the CA for violating the FDCPA. Hopefully the threat of the being sued for violating HIPPA, FCRA, and FDCPA violations would provide an incentive to delete. (Imagine XYZ Cancer Center appearing on your credit report when a third-party pulls your file. No matter how you slice it, a disclosure of medical information happened.) Once you've paid an account, validation is mute. Your payment is proof that you thought that the debt was valid. Second, if you've settled it already, you've lost any incentive for them to delete the account. If it's been settled, there is no longer a debt to be repaid. There is a legally binding contract that they would accept a certain amount to consider the matter done. The time for negotiating would have been when that negotiating was done. The only hope is that if you dispute the tradeline through the CRA, that the CA decides that there isn't any incentive to take the two seconds that they need to take to push the button to verify the tradeline; or that they would flinch if they aren't correctly reporting it as a medical debt, and there is sufficient threat of a suit under HIPPA, FDCPA and FCRA.
I wouldn't suggest paying it off immediately. That will not do anything for your credit. It will still be a collection. The only difference is that is will say "paid". A paid collection is negative. Now, there's two contradictions here. First, according to the FCRA collection agencies have to provide certain information to validate the debt however; the HIPAA states that a hospital cannot release any of that information. SO... if they send you that information, they'll be in violation of the HIPAA. If they don't send you that information they'll be in violation of the FCRA. I wouldn't hire a firm like lexington law. You can do this yourself
Credit Guy, they would be in violation of the FDCPA not the FCRA. The FDCPA is the law which governs what a debt collector needs to do to VALIDATE the account, the FCRA governs how that information can be reported on the credit report. Under the FCRA, medical debts need to be flagged as such so that neither the CRA, CA, and OC's violate HIPPA by disclosing medical information incorrectly to anyone but the consumer.
