I recently discovered that my credit score was mysteriously horrible, investigated, and saw that I had an outstanding payment due against a credit card that I don’t use. I logged into the card’s website to make the payment but the card had been closed and the site would not allow me to pay the amount due. I called and, at the start of the call, the lady was surprised by my inquiry because their system showed me as being in the clear (owing zero dollars) and was very curious about what date the credit report had been created on. She investigated and said that there had been a card membership charge that’s due every year that I hadn’t paid, that there had recently been a “credit adjustment”, the balance is now zero, I don’t owe them any money, and legally they’re not allowed to talk about the matter.
They then said that I can call the three credit bureaus to file a dispute.
I’m not sure what I should be disputing. It does seem like I owed them money - it wasn’t some error on their part. Since they say that they can’t discuss the issue, legally, I’m taking that to mean that they got a lien against me, got the money, and are now satisfied? Or would it be something else that they messed up and they’re scared to talk about it? My sense is that the lady was asking about the date because the $0 balance had probably just not percolated out to the credit agencies yet.
I signed into the Equifax site and it gives me an option to choose what to dispute. If the history is accurate, I’m not sure that I’m going to achieve anything. I’d expect that they’d call the credit card company, that the credit card would say, “No, he did owe us that money at that time.” And they’d reject the disputation.
Is there anything for me to dispute? Is there any value to following the process?
At a minimum you can make sure the credit companies know that the charge is no longer unpaid. That should at least turn your credit score in the right direction, and it will get better over time.
I’m surprised that one relatively small unpaid bill (I assume small because it was an annual fee for a credit card) would be enough to turn your credit score horrible. Maybe if you do file a dispute, there will be a place to explain the exact circumstances.
My credit score took a 27-point dive in one month because my extended credit for that month amounted to 41% of something (my income? not sure). It did not seem to matter that I had some unexpected medical bills that I charged, and that I paid the whole amount of the card debt on time, as I do every month. Credit scores are an incomplete snapshot of your credit worthiness, and I don’t much like them, but they are hard to fight.
If you are unhappy with your credit score then yes, absolutely you should dispute this.
The usual process with the annual “membership” fee is they charge it at the start of your membership year. If you never pay it and never use the card, at some point they figure they lost track of you, delete the charge, and close the card. You owe them nothing since you never used the card, which is the thing the fee is for.
The problem you have now is if they ever showed that balance as owing to a credit agency, they’re now going to have to clean that up as either a write-off, which the credit agency will score as a bad debt, or as a reversal of the charge, which the credit agency will show as a non-event.
Yeah, for a while, I was checking my credit score weekly. It would drop a few points more each week, as I used one main card and the balance owed kept growing as a percentage of the credit limit. Then when the bill came, I would pay the whole amount and my credit score would jump back up several points.
I dealt with this in a couple of ways:
I asked them to raise my credit limit (hadn’t changed for several years),
I stopped worrying about checking my credit sore so often.
The issue is that that card is going to be reported as 90 days past due for multiple years. The balance is irrelevant. 90 days past due is HUGE.
OP: Your probable best bet is to call back, ask for a supervisor and plead your case, asking them to remove themselves from your credit report. Disputing it likely won’t do any good as it is a legitimate report.
ETA: Find out who they sold your debt to (that’s why your balance was zero) and pay them off. Don’t settle for a lesser amount because “debt settled” on your record is also a big hit. Unless the amount is painful, then decide how you want to proceed.
I had a similar situation many years ago when I was refinancing a loan and managed to be $10 dollars short on one payment which carried over to each subsequent payment until I paid the loan off. This was pre Credit Karma so I had no way of knowing other than pulling a credit report.
Worst case is that your credit score is gonna suck for 7 years until this falls off.
I can only offer up my own experience, which agrees with LSLGuy’s advice.
It’s a tedious story, bur a few years ago a credit agency tracked me down claiming that I owed the State of Maryland several thousand dollars in back taxes. Disputing the charges required a fair bit of effort on my part to document why that was impossible, but I did it.
The credit agency eventually shut up and my credit rating is consistently fine. It was not a fun process, but I’m glad I did it. Partly because it’s good to have a good credit rating, but also because the people on the phone at the credit agency assume you are the scum of the earth, and treat you as such no matter what reasonable explanation you can provide for the mistake. While I doubt the specific individuals who treated me like dirt ever knew or cared that I successfully disputed the claim, it still felt good to prove them wrong.