Collection showing up on my Credit Report after 5 years?

Question

I check my credit quarterly and I noticed tonight a collection listed from an MCI accont dating back to 2001. The Collection agency has had the account since 2004. I contacted the collection agency and while they had my correct phone number on record, the address had the wrong city. They confirmed that they have had returned mail. So, attempts to contact me have been futile. I don't have any record of them calling me either. The debt is only for $50! It seems to have dropped my credit about 70 points.
First, can I be held accountable for this since they had the wrong address?? Also, I really have no idea if this account is even valid. I might of had MCI for long distance for a short period of time, but, this was 5 years ago. I disputed this through Experian and I am waiting for the results. Anyone have advice as to how to get this off my practically spotless report. Even if I pay the $50, will it increase my score or must I attempt to get it removed for that to happen.

Answer 1

A paid negative is just as bad as an unpaid negative.

An MCI account would have a statute of limitations (SOL) of 4 years (as utilities) for legally collecting the debt.

If you should or should not decide to pay the money I would recommend first sending them a debt validation letter. Send everything certified mail return receipt. They have 30+5 days to respond to your debt validation request (the 5 days is for them to mail their response to you)

If you decide to pay, make sure that they validate the debt first. After they have proved that the debt is yours and proved the amount is the true amount, send them a pay for delete letter.

Request in that letter that after they receive payment they will:
delete anything that they have placed on your reports
not continue to collect the debt or a portion of the debt if they agree to take a lesser amount as payment in full.
not sell the debt or the remainder of the debt.
You could also request to pay a percentage of the debt, (as old as it is, they probably payed less than a dollar for it).

Since you are out of the legal collecting SOL, you have the legal right to not pay. You have every right to send them a SOL letter - that basically says the debt is past the legal collecting period.

While paying the debt will NOT extend the reporting SOL on your credit reports, it may reset the collecting SOL of the debt.

Even though the debt is small, it's always good to have ALL agreements in writing. That way if they agree, in writing, to take a portion of the debt as payment in full etc.,etc.,etc. and you reset the SOL by paying, they cannot legally sell the remainder, collect the remainder or sue for it.

Answer 2

It should drop off on it's own after approximately 7 years, that's assuming that they are not continuing to report you. I wouldn't pay the $50 unless they agree to take the mark off of your credit report.

You say they had the wrong city, did they have the wrong ZIP CODE too .. the post office delivers mail using zip codes primarily, everything else secondary. It used to be that the PO forwarded mail for an entire year, but I don't see evidence of that any longer.. 6 months tops.

Yes, you are still responsible for debts even though the creditor had the wrong address.

For now, I'd sit back and see what Experian comes back with .. but even if they erase it, I don't think you are going to get your 70 pts back.

You say this this one mark dropped your score by 70 pts, that sounds a bit extreme. There are a lot of other things that can affect your credit score. If you have greater than 50% of your available credit line exceeded, that will cause your score to drop. And not using much credit at all period (no credit info) can cause it to become stagnant and not go up OR down.

Hope that helps?

Answer 3

If you do not think the debt is valid, then removal is your best option. You will likely have to file a second dispute. Only about a third of our clients' first disputes are successfully corrected.

The second dispute can be a formal letter that also lists carbon copy letters (cc:) on the bottom to the Federal Trade Commission and the office of your state's attorney general.

If you do not pay it, it should fall off of your credit report after 7 years. If you pay it, it will remain for another 7 years from the date you pay it. Fortunately, the negative impact that used to accompany paying on an old account has been eliminated for the most part by credit bureaus. They realized that you should not be penalized for paying an old account, rather it should help boost your score. The jury is still out on exactly what the impact of paying that old debt would be.

At least you do not have to worry about a judgment for such a small debt. Be careful to avoid acknowledging ownership or validity of the debt. This article may help:

Answer 4

First of all, do NOT make payment arrangements and send them any payments. Once you do this, the 7 year cycle starts all over since you 'reactivated' teh account. If your dispute with the Credit bureau does not result in a deletion; make a deal with the Collection agency to delete for payment in full. It would be worth it to pay it if they agree to delete it from your account since it is only $50 but make sure you get this in writing before sending anything. Also check your statute of limitations in your state; it may not even be collectable. Some collection agencies will attempt to collect even after teh SOL runs out since most debtors don't think to check it out. Good luck! I am currently trying to clean up my own credit record thru disputing....long , hard process but worth it in the end.

Answer 5

dont ever pay in a situation like that, continue to contact the company and also continue to argue with the credit bureaues until somebody gives in and gets tired of being hastled, it works trust me.

Answer 6

you should be ok-it will stay on your credit report for 7 years-put something in your credit report about this-contact all 3 credit agencies

Answer 7

You should contact them and ask how they can take you off. That happened to me too.

Answer 8

Have they despatched you a dunning letter yet? you should to deliver a call for to validate letter to the sequence company. which will save it off your comments till (if) they validate the debt.