I started receiving phone calls about a 13-year-old credit card debt. The debt is not in my credit report (SOL). I'm not worried about being sued (SOL, again). But the call did include a rather odd threat. Specifically, the credit agency said that "new laws" allow them to put an inquiry "at the bottom" of my credit report and that this "would affect my credit score". I'm assuming that collection agencies can legally run soft inquiries, but I assumed that hard inquiries wouldn't be allowed. What I would like to know from the experts is the following: 1) Can the debt collector really do anything (legal) to hurt my credit score at this point? 2) Is there a way for me to make the debt collector go away (specifically, can I get them to stop calling). 3) If I decide to pay (my wife wants me to settle - yeah, I know it's not going to the original lender and instead to these collection vultures), will the tradeline suddenly reappear (to my credit score's detriment)? Is there something I would need to do as part of the settlement to prevent any problems?
Keep Your Money Tradeline won't reappear if you pay. But I'm with you and against the wife's position that it would be a good idea to do so. The inquiry threat isn't terribly worrisome, although collections inquiries can be a problem for some potential creditors and keep you from getting credit at some places. A lot of people believe that if it's out of statute, a FOAD letter makes it clear that permissible purpose for pulling an inquiry is gone. Also, their threat may be an FDCPA violation if they know it's out of statute. Could be worth $1k to you. The biggest worry would be a 1099-C, and it might make sense to DV them instead of using a FOAD letter so that you have records that indicate a lack of documentary response on their part so that they're either dissuaded from filing a 1099-C form or so that you have some ammo to argue to the IRS that you shouldn't be made to recognize the phantom debt cancellation income in the event you do get a 1099-C next January. Again, to the extent they violate the FDCPA, get their $1k.
