I just found out today that some company has been "trying" to collect $20 from some past due account that I didn't know was past due as no one has ever tried to contact me. Well that's not exactly correct, 2-3 months ago someone contacted me and I told them to send me the original invoice and I would pay it but they never did. Now I have a $20 collections debt on my credit report and my score has gone down from about 780 to about 680.
I filed disputes with both agencies reporting it stating that I have no knowledge of this debt. But my question is will they remove it? Technically I do have knowledge but as of yet this collections company has yet to provide me with what I requested.
Second, if I just pay this amount will my credit score go back to where it was?
And how the heck does $20 effect a credit score that much. I have about $30K in fixed debts that I pay every month on time. It should be obvious I can afford a one time charge of $20.
2007-05-10
06:08:23
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5 answers
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asked by
Anonymous
in
Business & Finance
➔ Credit
Another question too... The debt has actually been sold to a debt collection agnecy so the original company has to stake in it any more. However, the debt is claimed to be from more than 5 years ago. I know the statue of limitations is 3 years where I live but I don't know if it applies? Can they even try to sell or collect a debt from five years ago that they never tried to collect before?
2007-05-10
08:22:02 ·
update #1
They can continue to try and collect even after the debt is past SOL. Though they cannot legally sue - but for $20 I doubt they would even bother.
They cannot continue to report the debt once it reaches the original obsolescence date from the original creditor.
By law they had 5 days to send you a notice in writing about the debt after their first phone call.
Since you requested validation in that call they legally should have provided it before they placed it on your reports (if they placed it on the reports after that phone call) But, since you have no proof of requesting validation, either in writing or on tape, it's your word against theirs.
Send them a debt validation letter. Send it certified mail return receipt. Do not sign the letter, print your initials or just type your name (signatures have a nasty habit of jumping from paper to paper when in the hands of a collector)
Find out if the amount they are claiming is the true amount, if they are licensed and/or bonded to collect in your state if your state requires it and that they have the legal right to try to collect the debt (it's not unknown that a collector will try to collect on a debt that they have no legal right to do so)
Then after they properly validate, (validation must come from the original creditor through the collector) you can take this a couple different ways.
Since you are past the legal collecting SOL, you do have the legal right to inform them of that fact. And if they fail to remove the trade line you can dispute the inaccuracies that they are reporting with the CRA's (collectors usually do report inaccuracies)
Or, you can send them a pay for delete letter. Demand that they delete the trade line upon payment. Never pay unless they agree, in writing, to delete. (a paid negative on your reports is still a negative)
If they agree to that, never pay by personal check (they like to dip their little fingers into bank accounts) Pay by money order or certified check.
You might go to the last link I have listed on my profile to find the free letter templates for debt validation, SOL, etc. You might also do some reading in the credit forum on there. I would also suggest doing some reading in the FCRA and the FDCPA. I have links listed in my profile to those sites also.
2007-05-10 09:29:54
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answer #1
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answered by echo 7
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The reason the $20 collections affects you more than $30K in fixed debts, is because the $20 collections account is a "bad" debt. "Bad" debt are things like debt consolidation loans, collections account, tax liens, judgments, and basically things that show irresponsibility with credit and/or paying bill obligations. "Good" debt are things like mortgages, student loans, revolving credit card accounts, and most of your credit products.
I think you are doing the right thing by disputing the debt. Since it's such a miniature-sized debt, I do not think it'd be likely that the collections agency would try to sue you over it.
Along with disputing the debt, I'd recomend speaking with the original creditor. Don't just speak to a rep, go above their heads to the manager of the department. Explain the situation and do not lose your cool. Offer to pay them the $20 directly to them. This might motivate them to withdrawal the collections account, since it'd be to their benefit to get the $20 directly from you(if they get paid through use of a collections agency, then they will only get a share of that money, since some of it goes to pay the collections agents).
Paying the debt will raise your score, but not significantly. It'll still be recorded as a collections, only this time as a "paid" collections as opposed to an unpaid one. However, paying off the debt first could make it easier to later dispute. Companies mostly only care about money...so once the company gets their $20, do you really think they'll bother to keep all of their paperwork about the account like 2yrs from now? If you dispute the account and they have no paperwork to prove that it's yours, then the credit bureaus are obligated to remove the bad collections account from your credit reports!
2007-05-10 07:35:29
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answer #2
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answered by Anonymous
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One thing we have to sure of, is to keep tract of what we are doing and what we are doing to do. We have to keep our receipts especially the ones that's on credit so we could trace the history of our credits. The reason is, like exactly what was happening right now to you, you have no record of what had been done with this 20.00 whether you're paid or not. Just like police officers, if you are the one they see speeding, no matter how long you had been good driving, you cannot tell them that you are, because you are caught at the time you're speeding, right? Proof is always your friend. Proof is always the one that will lean on everytime you need one. So be a packrat from now on. And yes, once it moved to collection, you are there for a good 7 years. Although, i heard that if you can PROVE that the reason you were put to collection is very reasonable, they might give you a chance when you apply for a loan. But watch out for high interest. If you have no evidence that it's "their" mistake that you are in collection, even for a dollar, it's good to fight it - again you need proof.
2007-05-10 06:42:08
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answer #3
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answered by earth angel 4
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Credit scores doesn't care if it's 1 cent or 5 million dollars..it's a collection! It can effect your scores from 10 points to 200 points
2007-05-10 06:37:38
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answer #4
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answered by Anonymous
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Any sequence, regardless of if it quite is for a utility or different, that's pronounced to the bureau is creates a damaging result on your credit. i could pay off the scholar loan and the credit enjoying cards first because of the fact the interest fee is greater on those.
2017-01-09 14:35:47
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answer #5
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answered by Anonymous
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