Credit Advice Needed

I have a tradeline listed on my credit account that is from a Dillar's Credit Card from back in 1995. I missed a few payments in 1997 while I was going to school. The account went over 90 days, however soonafter, I went into the local Dillard's Department store and paid the balance in full (also bought a bottle of cologne). I remember this distinctly.

Although this account was paid, I pulled my credit account in January and it shows as a me owing a balance of $281. I called to inquire about this (01-22-2002) and the person who I spoke to verified that this account was paid and said she would update my information with the 3 bureaus and send out a letter to me within 30 days relating this information. I failed to take down the person's name or extension I spoke with.

I pulled my credit report in June and the Dillards account was still listed so I disputed this and 30 days later it came back as VERIFIED!

I called Dillard's to inquire about this and they informed me that my old account that was paid off in 1998 was showing up with a balance of $281 and I needed to make payment arrangements.

This really pisses me off because I paid the account and it is still showing up as unpaid. I didn't keep my reciept from 1998, so basically, I have no proof that I paid it. I always thought they would have record of my payment, however they do not.

My question is, what should I do now? I have already disputed this and it came back verified. Would I have a chance in court with no documentation that I paid the account in 1998? And Dillard's also says they have no documentation of my phone call from 01-22-2002 where the person told me that the account was paid and that they would update my tradeline.

Any help is appreciated.

zombieooo