Collections Question

Discussion in 'Credit Talk' started by jon223, May 31, 2016.

  1. jon223

    jon223 Member

    Eight weeks ago my credit score was 797, through fault of my own, not paying attention, lack of time etc, I let a medical bill I was making payments slip and it went to collections. I saw a drop of my credit score by 50 points, I got my free credit score, saw the problem and I immediately paid the collection agency in full.

    My credit score has now dropped to 650. My question is how long can I expect to have to wait to see a recovery of my score to the 750-800 range.

    Thank in advance for the advise.
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Hey Jon- welcome to Creditnet, and thanks for your question.

    Those medical bills can sometimes be hard to keep track of, can't they? I'm curious what collection agency you were working with? And did they own the debt, or were they collecting on behalf of the original creditor?

    The paid collection should stay on your credit reports for about 7 1/2 years from the DOFD, but it will have less and less overall effect on your FICO scores as more time passes. Since you had a fairly high credit score to begin with, it will take you longer than someone with a lower score to fully recover though. It's really tough to say exactly how long because there are so many variables at play, but I would say at least a few years.

    Do you have a bunch of other credit accounts in good standing that are consistently adding positive payment history to your credit reports?
  3. jon223

    jon223 Member

    Thank you for the response.

    The letter I received states that the account has gone delinquent has been transferred to them and their client requests payment.

    The only credit I currently have is two credit cards, which I pay off in their entirety every month, and a mattress firm store card which has a zero balance. They are all in good standing and I have never been late on any accounts, other than the one mentioned here.
  4. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    No your account was transferred by the OC to the CA to collect. If you didn't pay it off already, you may have had some options to pursue to try and get it removed completely in return for payment. I've seen others have success with getting the medical provider to actually pull the account back from collections so you can pay them in full.

    Unfortunately, there's not much you can do now other than wait and try to do everything possible to add positive payment payment history to your credit reports, lower your credit utilization, improve your credit mix, etc.

    Frankly, I wish some legislation would get passed that removes medical debts from the whole credit reporting world. Probably won't happen, but I personally think it would be a positive change.
  5. mijd

    mijd Well-Known Member

    The letter I received states that the account has gone delinquent has been transferred to them and their client requests payment.

    Joshua, could it be interpreted from the above statement that the CA was collecting the debt for the OC? As medical bills are usually local, maybe he can request the OC delete the collection as a goodwill gesture? It may not work but in the OP case it can't hurt to try.
    Working in F&I, I see this a lot where someone may overloos a medical bill sometimes as low as $35 and has a collection on their CR. Even then most don't realize it is there. Also too, at least as far as auto loans go, medical collections are often overlooked when being considered for a car loan and a decent apr.
    A good friend had a collection (only baddie) fall off his EQ CR 11 months early. His CS gained 41 points. The same thing happened on his TU report the following month for a 44 point jump. That's after 6 years on his CRs.
  6. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Hey mijd- Yes, I would say that the statement should be interpreted to mean that the CA was collecting on behalf of the OC. I guess the OP could still try to ask for deletion, but my experience has been that once you pay the account off it's highly unlikely you will get anyone to do anything for you. That said, it certainly can't hurt to try.

    Good to hear that small medical collections are often overlooked by lenders when underwriting a car loan. It seems kind of ridiculous to penalize someone for a $35 medical collection that very well could've been a billing mistake by the medical provider and probably is no indication of whether the person will default on their car loan. The medical billing world is so messed up and difficult to deal with for consumers. Mistakes are made all the time and often hard to fix.
  7. jon223

    jon223 Member

    Thank you all for the advice.
  8. jam237

    jam237 Well-Known Member

    As Joshua said, the promise of payment is usually the only carrot that the consumer has to suave the CA to do anything.

    I would focus on the stick approach. :)

    Did they do anything in the process of collecting that you could threaten them with having to cut a check to you, that you would be willing to overlook if they make the trade line disappear? :)

    Did they call your cell phone?

    Did they call your cell phone with an auto-dialer?

    Did they send a letter and forget to include one of the requisite notices?

    Is there any part of the medical provider's name which appears on your actual credit report (as a third-party sees it)?

    Is there anything wrong in the information that they are reporting?
  9. jon223

    jon223 Member

    Again thank you for the advice.

    I wrote a letter to the collection agency describing my situation. Today I received a letter that says it confirms that the account in question has been removed electronically from my credit file.

    Hopefully this will mean my credit score rebounds pretty soon.

    Thank you everyone for your advise.
  10. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Wow, congrats! That's as good of an outcome as you could've hoped for. Let us know when you see the increase in your FICO scores hit and by how much, ok?

    Also, if you're willing to share some parts of the letter you wrote to the collection agency, I'm sure it will be very helpful for others who find themselves in the same situation at some point in the future.
  11. jon223

    jon223 Member

    The letter I sent is copied below, with the appropriate things changed for privacy. I use the FICO score tracker on my American Express card to track my credit score, and it has not yet updated since it went to 650. I believe AMEX updated the scores every month or so. As soon he score is updated, I will post it.

    Again, thank you all for the help.

    City, State, Zip
    Collection Agency Name
    Business Address

    Late Payment Regarding Account # 12345678

    To Whom It May concern,

    I recently discovered that I had the above referenced item in collections with yourselves. I discovered this much to my dismay when I saw that my credit score had dropped substantially. Upon seeing my credit score had dropped, I immediately obtained a copy of my free credit report and I saw the charge was for a collection you had put on my credit report reference an open invoice I had from XXXXXXX Emergency Medical Services. I then contacted yourselves immediately and paid the outstanding amount in full.

    I do not dispute the charge, it stems from a medical transport I received some years ago which was not covered by my health insurance policy. I obtained a plan from the medical provider to pay the sum off, I paid the majority of the funds. I then had questions about the remainder. This stemmed from my using an auto pay from my bank account and also paying some of the balance with my credit card so it was hard to track exactly what I had paid.

    I could not get hold of the person I had been dealing with and who had authorized the plan (James - 123-456-7890). After multiple attempts to contact James, I slowly forgot about the account and was never contacted by James again.

    I do not dispute that I owed the funds. I would like to appeal to your good nature and ask you to remove this item from my credit report. When I saw that it was outstanding I immediately resolved the issue. I pride myself on having good credit and in 10 years I have never missed a payment.

    If there is anything you could do to assist me in this matter, I would greatly appreciate it.

    I look forward to hearing from you,

    Yours faithfully,
  12. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    No problem, and thanks for sharing your letter! Well done.

    I guess this proves that goodwill letters to collection agencies for medical collections do work sometimes, even if you've already paid off the debt. Congrats again, and I look forward to hearing about what kind of increase you see in your FICO scores!
  13. jam237

    jam237 Well-Known Member

    Congrats... Proof that while I like the stick, there are some who do actually respond to the carrot approach... :)
  14. jon223

    jon223 Member

    American Express just updated my FICO Score, it is 797. Which is where it was before this incident.
  15. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Boom! Congrats again...that's awesome. Happy 4th to you jon!
  16. greeneyez

    greeneyez Well-Known Member

    I just recently wrote a pay-for-delete to a CA regarding a 15.00 (yup..fifteen bucks!) trade line. I sent it certified about two weeks ago.

    How long did it take for you to receive your response?

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