Need advice on a collection account that was not my fault

[Lexie123]

I never had been late or missed any payments in any of my credit card accounts, and I have stayed below 19% credit utilization for the past 7 years.  A few months ago, I received a medical bill from one of the anesthiologists for my c-section for only $130.  My insurance was supposed to cover that, so I forwarded the bill to my insurance and they said that I can disregard the bill.  A few months have passed, the same problem happened.  I kept receiving the same bill and I followed up with my insurance  asking my the bill is still unpaid.  They kept saying that it's already within the system and that they are still processing it.  They told me not to pay for it, so I didn't.  That was the biggest mistake I did.  I should have not listened to them because a few weeks later, I received a collections notice on that same bill.  I immediately called the collection company telling them that this was a mistake. My insurance company specifically told me not to pay for it because they said they were already in the processing of releasing the payment.  I asked if there is still a way to correct that record and if I will pay for it myself.  She said she can remove the record immediately with no problem.  I paid off the $130 and she said she removed the record already.  This collection account has caused my credit score to drop 56+ points from 704 to 648.  It has been several months now since that debt has been paid, but it still shows in the credit report.  Is this worth disputing?  I have been taking good care of my credit score and a stupid mistake for only $130 has caused me so much.  I am currently applying for DoD secret clearance and I'm afraid that this thing will affect my elligibility.  Any advice would be greatly appreciated.   

[Shogun]

---

@Lexie123 wrote:

I never had been late or missed any payments in any of my credit card accounts, and I have stayed below 19% credit utilization for the past 7 years.  A few months ago, I received a medical bill from one of the anesthiologists for my c-section for only $130.  My insurance was supposed to cover that, so I forwarded the bill to my insurance and they said that I can disregard the bill.  A few months have passed, the same problem happened.  I kept receiving the same bill and I followed up with my insurance  asking my the bill is still unpaid.  They kept saying that it's already within the system and that they are still processing it.  They told me not to pay for it, so I didn't.  That was the biggest mistake I did.  I should have not listened to them because a few weeks later, I received a collections notice on that same bill.  I immediately called the collection company telling them that this was a mistake. My insurance company specifically told me not to pay for it because they said they were already in the processing of releasing the payment.  I asked if there is still a way to correct that record and if I will pay for it myself.  She said she can remove the record immediately with no problem.  I paid off the $130 and she said she removed the record already.  This collection account has caused my credit score to drop 56+ points from 704 to 648.  It has been several months now since that debt has been paid, but it still shows in the credit report.  Is this worth disputing?  I have been taking good care of my credit score and a stupid mistake for only $130 has caused me so much.  I am currently applying for DoD secret clearance and I'm afraid that this thing will affect my elligibility.  Any advice would be greatly appreciated.   

---

I would send them a polite letter reminding of this and they have failed to follow through.

[Lexie123]

Thank you. I just checked my credit report with TransUnion and that derogatory mark has been removed.  However, it still shows in my Equifax report.  I haven't checked my Experian account yet if the record has been removed or not.  Another thing I'm curious of...it's been 3 months now since I resolved that problem. How come my credit score has not moved a single point even after I continue paying my other credit cards on time?  I use my credit card to pay for our monthly apartment rent but pay for it on time each month.  Do you think its best to stop doing that?  I accumulate at least $500+ every year for the points I earned since I've been doing that.  But if it hurts my credit, I will stop it.  

[Shogun]

I would keep doing it.  If you PIF, it's not going to hurt your score at all and you're making money doing it.

EQ has always been so slow to update for me.  Keep an eye on it and contact the CA if it doesn't go away.