Dealing with a paid off collection on credit report

[theunluckyone]

I currently have a paid off collection on my credit report marked as "Settled - less than full balance" - The balance was $1940 & the original creditor was a CA who bought some old debt that was about to expire.

At first, I had called the law firm debt collector hired by the CA and gotten them to reduce the amount to $1200. However, I received some unexpected money in form of a bonus at work so I sent in a check for the full balance. I got a letter saying that there was outstanding balance on my account of $740 (I have no idea how they came up with that when in fact, I had paid the full balance). A few days later, I got a check from the Collector for $740 and the account on my credit report was updated with the above statement.

I disputed with Equifax and Transunion & I'm in the process of starting a dispute with Experian but the Equifax & TU disputes were unsuccessful in getting the statement updated to "Balance Paid in full".

What should I be doing at this point? Should I contact the original CA on the credit report? Is there a big difference between Settled less tha full & Paid in full as far as the report is concerned? I still haven't encashed the check that was sent by the Collector. Should I just encash it? 

[Anonymous]

My guess is you will have to contact the CA.  I have found the EQ, EX and TU to be pretty useless in resolving these cases.  They all say they rely on those who report to them and tell you to contact the creditor. You are probably in a strong position with the CA to offer a PFD.  If they don't agree to PFD I would keep the money because the damage is done.

[theunluckyone]

Thanks! How would I approach a PFD in this scenario? Should I call them or should it be via a letter? 

Also, I found a letter from the Debt Collector recently saying that they saw that I hadn't encashed the check and if i wanted a replacement incase I had lost the check. 

[gdale6]

You did not get a PFD from the CA, you entered into a settlement agreement with them then overpaid it, hence the refund. There is nothing to dispute here their entry on your CRs is correct and I would cash the check and put the money toward good use, they are not gooing to undo the deal they made and give you the PFD. Its not going to matter much that it was settled or PIF, the Fico ding is the same.I would begin a campaign of GW letters to the CA asking that the TL be removed from your report. Good luck

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/GW-letter-Q-amp-A-Examples-and-GW-Success-Sto...

[theunluckyone]

Just to be sure - I should send the GW letters to the CA (Midland Funding LLC) after cashing in the check, correct? 

[gdale6]

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@theunluckyone wrote:

Just to be sure - I should send the GW letters to the CA (Midland Funding LLC) after cashing in the check, correct? 

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If they are the reporting CA then yes you send the GW letters to them and I would do so after their check clears the bank.