An old medical bill that I never received went to collection and ruined my credit score, what now?

[brswarm]

Hello, I am 40 years old and have had a credit score between 750 and 800 for about the last 20 years. I've never had a late payment or negative issue. My only credit fault has been high amounts of debt between 15000 and 20000 over the years, but my score never went below 750. Today I received an alert showing my credit score had dropped to 659! I called Trans Union and was told that a collection agency said I owed $426. I called the agency (cmre), and they said it was a hospital bill from 6/2011. I never received this bill, ever. I told him I was disputing this bill and I wanted all documentation sent to me. This is when he said he'd send it to an address that was 9 years old! I called the hospital next and they had my old address too. It seems they sent this bill to the old address and I never received it. So now my good credit has been ruined because of a $426 hospital error and I'm not sure if there is anything I can do about it. I did dispute this with Trans Union. They said they will investigate and I'll hear the result in about 30 to 35 days. The guy from the collection agency said that if I pay it, it will be removed from my credit report within 30 days. Is this true? Should I just pay it? Do I need to dispute this with other credit agencies like experian? I am planning to apply for a mortgage later this year. How do I correct this and get my score back where it should be? I've also read that mortgage companies know this happens with medical bills and will account for it but this sounds too good to be true. Any advice? Any help would be greatly appreciated!

[pizzadude]

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@brswarm wrote:
Hello, I am 40 years old and have had a credit score between 750 and 800 for about the last 20 years. I've never had a late payment or negative issue. My only credit fault has been high amounts of debt between 15000 and 20000 over the years, but my score never went below 750. Today I received an alert showing my credit score had dropped to 659! I called Trans Union and was told that a collection agency said I owed $426. I called the agency (cmre), and they said it was a hospital bill from 6/2011. I never received this bill, ever. I told him I was disputing this bill and I wanted all documentation sent to me. This is when he said he'd send it to an address that was 9 years old! I called the hospital next and they had my old address too. It seems they sent this bill to the old address and I never received it. So now my good credit has been ruined because of a $426 hospital error and I'm not sure if there is anything I can do about it. I did dispute this with Trans Union. They said they will investigate and I'll hear the result in about 30 to 35 days. The guy from the collection agency said that if I pay it, it will be removed from my credit report within 30 days. Is this true? Should I just pay it? Do I need to dispute this with other credit agencies like experian? I am planning to apply for a mortgage later this year. How do I correct this and get my score back where it should be? I've also read that mortgage companies know this happens with medical bills and will account for it but this sounds too good to be true. Any advice? Any help would be greatly appreciated!

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If the Collection Agency agrees to delete the collection upon payment then I would take them up on the offer.   You can ask them to put it in writing as well if you don't feel comfortable with what they are telling you on the phone.

The good news is that once the collection is deleted your FICO score will return back to where it was previously.

[brswarm]

Thanks for the reply. I did end up paying the collection agency and it was removed the next day! I called transunion to talk more about it and the woman said that there was no collection there. I explained it to her and had my doubts but it turns out that they really did remove it. My score did go back up too. I can't believe it worked out that easily. Thanks again

[pizzadude]

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@brswarm wrote:
Thanks for the reply. I did end up paying the collection agency and it was removed the next day! I called transunion to talk more about it and the woman said that there was no collection there. I explained it to her and had my doubts but it turns out that they really did remove it. My score did go back up too. I can't believe it worked out that easily. Thanks again

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Great  !!   It's always nice when it works out as easily as that.....

[2NE1]

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@pizzadude wrote:

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@brswarm wrote:
Thanks for the reply. I did end up paying the collection agency and it was removed the next day! I called transunion to talk more about it and the woman said that there was no collection there. I explained it to her and had my doubts but it turns out that they really did remove it. My score did go back up too. I can't believe it worked out that easily. Thanks again

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Great  !!   It's always nice when it works out as easily as that.....

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Congrats!  especially since it worked without a PFD written agreement!