I’ve been putting off this post for a long time since I like my anonymity and this lets people behind the curtain a little. About 5 or 6 years ago I really messed up my credit. It started with a medical bill and some irresponsibility. It ended with me not paying my bills for a good while, but stopped short of a bankruptcy.
One of the accounts that I was delinquent on was a credit card at a major department store. I had around $3400 worth of debt on the card. About 4 and a half years ago as things were about their worst, the credit department at the store contacted me about a charge off. They said they would settle for $2700. As odd as this sounds, I actually could come up with the money, so I accepted. This seems to have been a terrible decision.
I ended up getting my bills under control. I had maintained a good relationship with a local bank and actually got a home loan about two years ago. They had to do an in house loan since my credit score was still too poor for me to lock in a good long term rate with a national company. Since then I’ve done fine with my credit. Every 6 months or so, I try for a new card. It’s hit or miss. Some places give me the “not just no, but hell no” letter, but I’ve also managed to open some accounts with decent terms.
I’m a subscriber to a “credit service” where I can see changes in my credit score. My current score is still poor (in the low 600’s). I’ve mostly narrowed it down to one thing. The account that I had with the major department store seems to be the problem. Here is what’s listed for a negative from my credit service (with a few things x’d out and using code to try to keep some spacing):
I can’t seem to get the full report info for this account from this crappy credit service, but I know that the account was closed and paid off around 9/2000. So why does this keep showing up as still being a current “missed payment” or “became derogatory” when this is four and a half years old? I do understand that they didn’t get fully paid off, but this didn’t just happen last month like the reported information seems to indicate. How can I fix this?
I will certainly pay to pull a full credit report if the additional information would help answer this question. My goal is to get this fixed so I can lock in a decent long term rate on my home before it’s too late. Thank you for any help.
It’ll stay on your credit report for 7 years from when it went delinquent.
Since you said all this happened 5 or 6 years ago, it sounds like you’ve still got a year or two before it’ll come off. The fact that you paid a settled amount 4 1/2 years ago is irrelevent in regards to when it comes off the report.
I understand that. What I don’t understand is why it’s showing up like it just happened (read the dates). I was hoping that I had made that clear. Thanks though.
Pay to pull the full credit report from one of the three major agencies. The one you have doesn’t seem right. The credit report from one of the agencies (which is what your potential creditors look at) should indicate the date of the charge off. If it doesn’t, contact that agency and see how you need to go about correcting that.
Champion beat me to it, I was going to recomend getting your actual credit reports. I had the similar type of situation but I did file bankruptcy. When I pulled my free credit reports last month via http://www.annualcreditreport.com (check availability dates for your state), I noticed that there was an account that was discharged in my bankruptcy. It had a current date and even though it said discharged it showed a balance due. I filed discrepencies with all 3 and transunion has already corrected the information.
Call up the department store. Ask for the mailing address for “credit reporting” or “legal”.
Send a certified, return receipt requested letter to them explaining that they are reporting in error, and that you would like this error corrected on all 3 big bureaus.
If no response within a reasonable time frame, send another letter wherein you threaten to sue for llibel, defamation of character, etc.
Sue.
If I was you and not nice:
Dispute the item on all credit bureaus where it’s wrong.
If the department store removes the item or corrects the item, smile.
If not, apply for a loan that would save you money versus your current situation, assuming you had better credit.
Sue them for violating the Fair Credit Reporting Act. Also sue them for losses associated with not getting the loan in step 3, along with llibel, defamation of character, etc.
Before embarking on Jonathan’s plan of attack, I would suggest you get something that many lawyers like to call “facts.” In my experience, having “facts” can help you immeasurably when you sue. A “fact” that would help you determine whether you ought to sue everybody and their dog is what your credit report says, because this is the document on which your would-be creditors rely in judging your credit score. If, in fact, your actual credit report reflects accurate information, and the abbreviated version you posted (which I understood to be from some entity other than one of the three agencies) is simply off, suing either the store (which, under that scenario, properly reported) or the credit agencies (ditto) would make you older and poorer, but no closer to resolution.
That is the most comprehensive, easiest to use credit check site I’ve ever seen. And no hidden costs or gimicks. The only charge ($6.95) was to get the overall credit score.
Here’s a wild and crazy idea that wouldn’t be cheap, but might well be less than suing everyone in sight: pay the remaining $700 to the store.
The idea would be to present yourself as a reformed character who wishes to clear things up. Your condition is that they must make the adjustments to your credit report necessary to make you look like the very model of probity and rectitude that you now have become.
I know that they long since agreed to settle for less. I don’t know if they could or would do this. But it might be worth a shot.
It’s showing up with those dates because that’s the last time it was reported.
The payment date looks like it’s wrong, but I can’t tell if it’s wrong, or the formatting just isn’t right. If it’s wrong, it’s probably something in the way their computer system that sends the info to the credit bureaus is set up.
Why are they continuing to report it even though it was charged off years ago? Because they can, and it’s probably an automated process for them, so it’s not taking any effort on their part. As long as they’re reporting factual information that is within the seven year period, they can continue to submit it.
You could dispute the information based on the payment date being wrong. They will most likely correct the date and continue reporting the info until the seven years are up. There is a chance they would decide it’s not worth their bother and just not respond to the dispute, in which case the bureau has to remove the info from your report.
Also, it’s not a good idea to apply for credit cards on a regular basis, as every application you submit will lead to the card company requesting your credit report.
Constant inquires from CC companies are hits on your credit report; when you go for a meaningful loan (mortgage, home equity, etc) those lenders are going to think you’re running all over town, applying for everything, maybe getting a few, but with a scant payment history.
Lots of new credit cards are not good if your credit score is low. Keep a few major cards, use them and pay them on time. Don’t go signing up for every ‘preapproved’ and “You’ll get 15% off all your purchases today if you sign up for our scammy store credit card (21.9% interest, most likely, commences immediately upon you carrying the item out of the store - good thing you can’t hear the parenthesis in this pitch)”
I work at a credit bureau, and there just isn’t enough information to give you the right answer.
The account should show as “settled”…and it should show a zero balance. It should show that it was closed back when you settled it. While having derog on your credit report hurts your score, the older it gets, the less it impacts your score.
Simply calling the company might be all that is needed. They might look at the account and simply send an automated update.
Whatever action they agree to, they should send you a letter stating the correction. It probably won’t make that much of a difference if it is changed(score), because ‘settled’ for less than the full balance is pretty bad. Heck, it should be pretty bad. You didn’t pay back the money someone lent you.
As for lawsuits, you do have to demonstrate that the error (if it is one) caused “X” amount of harm, etc. For example, say you got a mtg that was 1.5% higher because the derog was so significant it affected your rate. You might be able to make a case for being harmed.
Thanks everyone! I’ll do my best to address some of these replies directly. First though, a big thanks to odaran. I was prepared to pay $40 for the big three credit reports. Not only were the reports free through that link, but it really seemed to cut down on the amount of extra services that they try to sell you.
I pulled my credit report and I’ve pretty much came to the conclusion that I need to dump that monthly credit service (CreditInform if you were curious). They say they are based off Equifax, but all Equifax really shows is that the department store is reporting the account every month, which is their right. The information reported is correct. I’m not sure why CreditInform is telling me it’s being reported as a new debt, because it’s not. The dates are definitely appearing wrong with CreditInform, but not Equifax.
Thanks for the suggestion, but from what I know of how credit reporting works, this would actually be a very bad idea. The account was closed the month of 6/2000, so it will be gone in a little over 2 years. Maybe Philster can confirm or correct this, but I believe that if I did manage to get them to take the remaining $700, all that would happen is that this delinquent account would show up for another 7 years. These accounts appear for 7 years after the last action.
Credit is a catch 22. You have to have credit to get credit. The more unused credit you have, the better your score. I kept a small limit major credit card through my tough times. Naturally even during these times I would get card offers, but with terrible terms. About two and a half years ago, I got my first offer for a card that had ok terms. I applied and got a card with a dinky limit. A year later I got another card from the same company but with twice the limit. A few months ago, I got a card with a good sized limit and good terms. I agree that applying for every single offer is a bad thing. I don’t think it’s a bad thing to apply every six months or so when you are needing to build your credit. It seems to be working for me.
I have non-ass-reaming cards. I bought a house. This is just an attempt to get my credit to a pristine state where I can nail down a great long term mortgage rate. After looking at the three credit reports, I really don’t think that’s going to happen for another two to three years. It’s a bummer, but it’s my own fault.
I missed that the OP had a 3rd-party credit report he was working on. My bad.
I always pull a report directly from one of the big three before acting on it.
I’ve seen 3rd-party credit sources with completely bogus tradelines on them.
So, to reinforce another poster, no, don’t do nothing 'till you get your Equifax report from Equifax, your Experian report from Experian, and your Transunion from Transunion.
No, no, no. That’s a very bad idea. First of all, they already settled, and they have shown themselves to be less than fair & honest. Second of all, any later activity will often extend the reporting for another 7 years. In theory, it’s not supposed to, but in practice it often does.
Simply “dispute” the item with all the Credit reporting agencies that list it. Also write the Store itself. Give them a month or so for the dust to clear. THEN, if you don’t get it clear- then talk about lawsuits.
Do note that a "dispute’ will often have that item simply going “bye-bye”.