I had a small $50 bad debt on my CRA's that was not mine. I have attempted to have it removed but was unsuccessful. It shows up as paid off. I finally gave up on having it deleted and wrote a 100 word consumer statement saying the debt was not mine. It is old (1999) and since it shows paid off, I assumed it does not affect my credit score much. Am I right on this? With my explanation, how much does it affect my score? On another note, I carefully worded my 100 word statement, checking it for clarity, grammer and spelling. Equifax rewrote it before inserting it, using bad grammer and spelling and making me look almost illiterate. Are they required to put my statement in the report as I wrote it?
Well, actually no. 1999 is considered still somewhat recent. After 3 years and then 5 years the impact lessens. But a collection account can be very damaging to your credit. I've read here that some people have mid 600 scores with only several collection accounts and I have the same score with a 2 1/2 year old BK. If the account is not yours, raise Hell! Do you have copies of the disputes you sent earlier? If so, write a letter saying you're about to take them to court and send copies of your previous disputes to their legal dept. Additionally, who is reporting this account? Go after them directly. It's the most effective, efficient way to get a collection account off. There are lots of letters posted here that have worked for us. Why should you have to pay for someone else's mistake? Also, if I were you, I'd call the CRA and try to get them to remove it right now. Sometimes when you sound serious and it's really an error you can get them to correct it on the phone.
The collection agency is reporting it, not the creditor. The collection agency verified it the first time. They have no address or phone number (they claim) for the creditor so that is not someone I can contact directly, nor can I have the CRA's contact them directly. Their verification consists of saying your name, it must be you. I have ordered new copies of all my reports. I will take your advice and try again.
Are we talking 10 points off the FICO score for this one small problem? 50? Does anyone have a guess?
The very first thing I would do is have that 100 word statement removed on the basis that they misworded your remarks and therefore misrepresented your statement. I never submit those 100 word statements. All the Credit books tell you to remove those first thing and never use them.
I also have only one collection account on my Equifax report for 53.00. When I got my scorepower results, it considered this a public record and was the most damaging thing in my report. I mean, 53.00 is 53.00. To hurt your score to the degree that it seems to doesn't sound right.
I'm learning (on my own, AND spoke at length with a colleague who is a state auditor in the banking industry) about collections and scores. THEY ARE THE SINGLE MOST DAMAGING ITEM ON A CREDIT BUREAU--PERIOD. (Assuming no BK's from yesterday, or a judgment, and so on.) Now, having had two CA dupes removed from Experian, on average, I'd say it boosted my score by 50 points--give or take 5 points because some other stuff has changed as well. Do I think they should have the power to crumble an otherswise decent bureau/score (paid, unpaid--doesn't seem to matter)? NO. But, I don't make the scoring model. I've seen multitudes of credit bureaus since I'm in the industry, and I can also tell you this: I've witnessed scores better than mine with 30 and 60 day lates as recent as 18-24 months, WITH NO COLLECTIONS and below 50% revolving ratio, compared against my 30 and 60 day lates from 1995 student loans, ONE $68 collection (actually twice as it duped on Experian and TransUnion), and 70% revolving ratio. Now, to the common sense person, it would seem a person who hasn't had one late payment in 6 years with one lousy $68 collection would score better than a person with a bunch of lates from 2 years ago, but with no collection and a lower ratio. To me, a history of paying your bills on time should take top priority, but, alas it is not always true. That is why--at least to me--FICOs, Beacons, and what-have-yous are a complete joke. And don't get me started on the BK side of it or I'll be here all day. Sorry for the ramble. David
Re: Jsever and Lofico David: Thanks for your comments. I'm shocked that this could affect my score 50 porints. Jsever: Do you have any idea how much this hurt your score?Is it in the 50 point range like David said? Lofico: If I cannot get the negative off my reports, then why is the 100 word statement bad? Logic tells me that an explanation is better than nothing. Of course, using logic when dealing with CRA's and CA's can only get you into trouble.
Re: Jsever and Lofico Unfortunately, it was the first time I knew my score so I have no way of knowing. But when there was only one item to reference and the strong language made me think it would have been considerably higher (605 by the way). The second reference was to the short length of time the collection had been listed. It was reported in 2000. Yours is older so it probably doesn't effect your score as much as mine.
Re: Jsever and Lofico I can tell you that ONE collection($246) depending on how it is reported can KILL your score. My husband had a collection from "1995" that was unpaid, the idiots at Equifax has this reported as a recent delinquent account, remember 1995. His score was 577, I disputed that item (for how it was reported) and while in dispute it jumped to 650!!!!!!!!!! As for the statements, from what I have read creditors "rarely" even look at these, they don't really care why it's on there, a delinquency to them is just that no matter if it is wrong or right, not fair I know but that's how it seems to be.
Re: Jsever and Lofico I disputed the collection about two days after I got my score. I guess I would have to buy the scorepower again to see if it jumped. Another 12.95!
100 word statement Also, the 100 word statement is a joke just to make us think we've done something to improve our situation. We have discussed this one before, and there's not one computer model that could take the 100 word statement into consideration. The only time it would even begin to help you is if you got a manual credit review. By the way, this is a HUGE joke if they can't even give you an address or phone number for the creditor. Sounds like they just made up a debt for you. If I were you, I'd request validation from the collection agency. Reference the fact that you've called them numerous times about this. After they don't bother responding, send the second letter demanding removal. Once you've sent these letters, you can send another letter to the bureaus referencing you've requested validation of the debt from the collection agency and you've received none. If they don't (this should take about 50 days total), apply for a nice prime card and get denied (this sets up harms). then sue them in small claims court and you'll get a minimum of 1,000 for your troubles for their violation of the FDCPA and the FCRA.
Re: 100 word statement Marie, I think I will follow your advice on this as well, I have problem with an agency that has failed to respond to my request for validation and it has been a month since I wrote them. I am going to write another letter and then I will contact the CRA about this and pursue it from there. Thank you! Cyprigirl
Re: Jsever and Lofico Thanks for the backup/"validation" (he, he). Collection accounts do "kill"--and unfairly so. Years of on-time mortgage payments, credit card payments, and installments as a foundation are NO BARRIER to the damage one collection can do. And, while I'm spouting, it seems to me that anybody and their dog can slap them on your credit report just willy nilly--regardless of individual circumstance. David
