How can a $29 dispute sink a sterling credit record?

[Anonymous]

I'm a little bit stunned right now.

My wife and I are considering the possibility of remodeling our home next year so I pulled my credit report for the first time ever and my FICO is in the mid-600s?!?!  I honestly expected it to be in the high-700 to low-800 range.

I can say, without hyperbole, that we have a truly exceptional credit history with only one problem; Several years ago I got in a dispute with eBay's credit company (GE) after I refused to pay a $29 late fee (I never received a bill yet, after they finally sent me one and the principal was promptly paid, they still pursued the late fee and wouldn't compromise). Eventually that late fee compounded to $180, was written off, and sold to a collections company.

I'm SHOCKED that the write-off of one $29 late fee and the associated collection has apparently sunk my credit score like a rock despite 15+ years of paying $ thousands in bills, in full, and on time each month.  On just our new mortgage alone, this $29 could end up costing us $300 / month for 15 years;  that seems a little extreme.

I need to get this fixed, but the thought of giving in to, what feels like, credit blackmail makes my skin crawl. Any thoughts or suggestions?

Message Edited by eljeffe on 12-16-2007 11:47 AM

[MidnightVoice]

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eljeffe wrote:

I'm a little bit stunned right now.

My wife and I are considering the possibility of remodeling our home next year so I pulled my credit report for the first time ever and my FICO is in the mid-600s?!?!  I honestly expected it to be in the high-700 to low-800 range.

I can say, without hyperbole, that we have a truly exceptional credit history with only one problem; Several years ago I got in a dispute with eBay's credit company (GE) after I refused to pay a $29 late fee (I never received a bill yet, after they finally sent me one and the principal was promptly paid, they still pursued the late fee and wouldn't compromise). Eventually that late fee compounded to $180, was written off, and sold to a collections company.

I'm SHOCKED that the write-off of one $29 late fee and the associated collection has apparently sunk my credit score like a rock despite 15+ years of paying $ thousands in bills, in full, and on time each month.

I need to get this fixed, but the thought of giving in to, what feels like, credit blackmail makes my skin crawl. Any thoughts or suggestions?

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Did you pull all three reports and scores?

Is that a FICO or a FAKO?

Is there anything else on the CRs that is dragging you down?

Are there any errors on the CRs?

[Anonymous]

Yes, it's the FICO score and I did pull all three reports.  They are all essentially identical with only this one problem.  The only thing that seems wierd to me is the fact that the collection account is dated very recently (this summer) even though it's part of the (approximately 3 year old) charge off.

[MidnightVoice]

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eljeffe wrote:

Yes, it's the FICO score and I did pull all three reports.  They are all essentially identical with only this one problem.  The only thing that seems wierd to me is the fact that the collection account is dated very recently (this summer) even though it's part of the (approximately 3 year old) charge off.

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Did you pay the collection agancy?

Opinions vary about the effect of a collection on score.  One that was 6.75 years old just dropped off my DWs report, and her EQ score went up 56 points.  YMMV.

[Anonymous]

No, I haven't paid simply on principal.  It seems, however, that standing on principal when it costs me this much may be a bit quixotic.

I also noticed that the charge-off is $100, while the collection agency wants $180;  even more fuel to stoke the fire of my discontent.

[MidnightVoice]

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eljeffe wrote:

No, I haven't paid simply on principal.  It seems, however, that standing on principal when it costs me this much may be a bit quixotic.

I also noticed that the charge-off is $100, while the collection agency wants $180;  even more fuel to stoke the fire of my discontent.

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This sounds like a classic PFD 

[Anonymous]

sorry.   PFD?

[MidnightVoice]

Pay for delete.  You offer to pay for the collection if they will delete it from your records.

Others are much more expert in this area than I.

[haulingthescoreup]

Hi, eljeffe --others will come along who have a lot more experience with this, but for now, I have two suggestions:

First, start by reading this PFD thread:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=2659

Second, I think that you would get a lot more responses if this thread were over on the General Credit forum. To get the thread moved, open one of your posts and click the "Options" button, and then click "Report abuse to a moderator." In the text box you can ask them to move this to General Credit, or ask them where they think this thread would do best. This isn't abuse, of course, but it will catch the attention of whichever mods are currently wandering about.

You might well also get a bunch of points back by changing the time in your billing cycles that you usually pay. If you pay down or off your balances before they report (usually on their statement dates, but not always), it lowers your utilization of revolving credit. Hmm, I guess that makes three suggestions, sort of! Good luck.

[Red1Blue]

If they accept PFD, just pay it and get it off the CR's and be done with it. It is not worth fighting the system and loosing your perfect Credit History.