@kythe571 wrote:I want to buy a house in the next 6 months or so. I have a few old collections and late payments, but everything is paid in full. My mortgage FICO (the middle score of versions 5, 4, and 2) is 640. I was hoping to increase that even more in the next few months.
Then I got a notification from Equifax that there was a new collection item. I didn't even know I had a bill. I changed car insurance companies, and thought I did so on a date when everything was paid in full from the previous company. I shouldn't have owed anything. Apparantly they came up with an "early cancellation fee" and some back payment from something, and I owe them $92. They sent two bills to an address I haven't lived at for years, both were returned to the company. So they sent it to a collections agency and my credit took a hit.
I'm really upset because if I had known about this, I would have paid it before it hit collections. I thought I was doing so well at rebuilding my credit. But now, it will be on my credit report for 7 years. Even if I pay it, it won't just disappear. Is there any way out of this?
It might just disappeear. Who is the collection company? Many will do a pay for delete
@kythe571 wrote:I want to buy a house in the next 6 months or so. I have a few old collections and late payments, but everything is paid in full. My mortgage FICO (the middle score of versions 5, 4, and 2) is 640. I was hoping to increase that even more in the next few months.
Then I got a notification from Equifax that there was a new collection item. I didn't even know I had a bill. I changed car insurance companies, and thought I did so on a date when everything was paid in full from the previous company. I shouldn't have owed anything. Apparantly they came up with an "early cancellation fee" and some back payment from something, and I owe them $92. They sent two bills to an address I haven't lived at for years, both were returned to the company. So they sent it to a collections agency and my credit took a hit.
I'm really upset because if I had known about this, I would have paid it before it hit collections. I thought I was doing so well at rebuilding my credit. But now, it will be on my credit report for 7 years. Even if I pay it, it won't just disappear. Is there any way out of this?
Yes! 
Why did they send mail to an old address? I mean, is that the address that was current when you had your account with them, or had you moved and informed them prior to closing your account? If the latter, they have some 'splainin to do!
Regardless, as mentioned upthread, it's very likely that you can do a 'pay for delete'--I've done this myself, with multiple collections (mine were all medical bills that came in while I was still hospitalized--I was in the hospital so long, and mail went unopened, so they got sent to collections). In my case, simply explaining the situation to each creditor solved the problem.
To summarize what I did: contact the creditor; tell them you'll pay in full immediately *if* they send you a written statement promising to delete the derogatory record upon receipt; once you have that in writing, pay the bill. In my case, each one came off my reports almost immediately.
@kythe571 wrote:Thanks.
Here are some more questions about the technicalities:
Who do I communicate with - the insurance company, or the collections agency?
You're welcome.
I believe it would be the collection agency. My memory is fuzzy about this because I was so ill at the time; I can't carve it in stone, but I'm reasonably sure we dealt with collection agencies directly, not the original creditors.
I realize there may be two issues here: One is that I believe the insurance company was a bit shady in sending the bill to my old address, then going straight to a creditor. I know they have my recent address because they verified zip code on the phone before even talking to me. Plus, they have my email and phone number too. So I felt like they had pulled one over by sending a bill to a collection agency without a lot of effort to contact me. Does this imply the bill isn't valid, and how do I handle that?
Do you have anything they mailed to your current address? From before any of this. Even if you used paperless billing or auto-payments or whatever, your statements (in PDF form) would contain your address. Do you have any of those stored on a hard drive somewhere? I'm no attorney or anything, but if they deliberately sent bills to a known bad address, that smacks of doing something wrong, you know?! (Although I don't see what they'd gain by doing so.) See if you can find a statement or anything they sent you that contained your current address.
Then there is the issue of the collection agency. I believe a "pay for delete" would come from them, because they are they are the ones who report to the credit bureaus. But if there is a chance this bill isn't valid, it seems I shouldn't pay it.
Even if the insurance company knowingly sent the bill to a bad address, I don't think that's legal cause to make the bill invalid but, again, I'm not a lawyer. I think the bill is valid, so focus your energy on getting the bad record off your reports. Yes, contact the collection agency. Do exactly what I outlined earlier. In my case, the explanation was that I was still in the hospital when all their first, second, third....notices came in, and no one was opening my mail, so I didn't know about them. In your case, tell them about the company sending the bill to an old address; make sure you point out that the auto-forwarding order (from the postal service) had long since expired, so those bills were returned to the sender and you never saw them. Be very polite and calm when you talk to them. I had numerous collections, and 100% were resolved this way.
