This cannot be true.

[Anonymous]

As I begin to become re-acquainted with credit scoring (I spent some time in lending about 9 yrs ago) I am subsequently re-acquainted with how absolutely insanely asinine it is. Please learn of my crap-tastic situ and tell me where I'm going wrong. I'll try to be as brief as possible.

First, outside of what I'm about to detail. my credit report is pretty darn ship-shape. No late payments. No other collections. No credit cards. One small ($1500) loan nearly paid off.

Reader's Digest Version:

I had about 12 visits over a 3 month period (weekly) with a doctor about 3 yrs ago.

My employer was to cover each one of these visits in FULL.

Long story short: this never happened...of course.  It was (at the time) an going battle of clearing up a misunderstanding of epic proportions.

Well, it seemed to be all "figured out" as I no longer received mail or telephone calls from the provider insisting payment...I even called to confirm things were settled and in no uncertain terms it was made clear to me everything was kosher. My CR has been clear of this entire ordeal for 2 years until now.

Here we are, 36 months removed and when I ran my credit in preparation for a mortgage, what do you know...not 12 but TWENTY-21 $50 collections.

Absolutely floored, I sought out the collection agency..and sure as crap, all 21 are linked back to these doctor's visits over 14 MONTHS by the way, not THREE. Again, the reality is/was these were weekly appts for 3 months. How I go about proving this 3 yrs on is a dialogue for another thread I suppose.

Now to save time, let's skip past the negotiations and hypothesize that I simply would agree to settle with these folks on these 21 collections, as my employer has put in writing that they will immediately reimburse me.

Understanding this, please consider:

1. If I pay these collections, I understand that they'll remain on my CR for another SEVEN years from the DATE of PAYMENT/SATISFACTION, not from the initial report date. 

2a. If I do nothing, they will "fall off" in 3 1/2 yrs when the 7 yr limit has been reached...ONLY if...

 2.b. The debt is not bought from another collection agency, in which case ANOTHER SEVEN YEAR window will open.

3. I have always been led to believe that it's 7 years from 30 days from the last payment/non payment due date. So, let's say the due date was June 30 and you never paid...the 7 year period would start from July 30th of that year.  A Fico rep assured me that WASN'T the case, though. If I PAY the debt, a new 7 yr window will open. Mind-blowing of course. No problems with waiing for the initial 7 yr window to expire, but the idea that doing the right things buys you another 7 yrs is beyond comprehension to me.

4. Further Insanity: PAID collections affect my score IDENTICALLY as UNPAID collections do. Good god, just think about that sentence.

5. So when considering 2a and 4: what other reasonable conclusion (from a credit standpoint anyway) can you come to other than to NOT pay your bills/these collections, as paying them affects you identically from a score standpoint AND WORSE, paying them simply extends the amount of time they'll sit on your CR?

I understand individual lenders will now "see" these collections as paid, but get real, it's numbers game in the world today and we know it, 20 of these appearing paid or unpaid and putting me at a 600 CS will devastate me.

I of course am trying to get these removed altogether...even offering the FULL payment of debt I really do not owe but they (the collection agency) are adamant that these will stay for the 7 years.

Now, I understand how this should never happen in the first place, but it did, so I'm just looking to move forward from here.

Can someone speak to the validity of my numbered points and detail my options, if any, and the BEST way to proceed from here.

Quite clearly, this "system" seems to nearly insist on NOT doing the "right" thing, as it only costs you money AND extends the time these damaging accounts stay on your record.

Here's to hoping I've been terribly informed though, and such a methodology is as inexistent as a unicorn and consequently, taking care of this debt will NOT extend the accounts 7 yrs and actually improve my score right from the start.

A million thanks for listening and helping.

What an unspeakable mess. 

  James

[Anonymous]

They are lying to you.

If you paid them right now (which I don't suggest), the items will drop from your credit reports at 7 years from the dates of the individual doctor's visits.

I would contact the OC's billing department and discuss it with them.  I would cease any contact of any type with the CA immediately.

I would ask the OC to deal with it.  If they say there's nothing they can do, I would look into the HIPAA process - google "HIPAA letter process".  You've found the right link when it's by "why chat".  Since it sounds like you've talked to the CA, your options may be limited.  However, I believe if you carefully read the letters involved, you can adjust them to your situation quite effectively. 

It is correct that a paid collection is scored the same as an unpaid one.  It's also true that, depending on what state you live in, paying on a debt can re-set the statute of limitations of that debt.  It does NOT extend the credit reporting time period.  The only time something like that happens is tax liens - those remain for 7 years from the date paid. 

I would also keep in mind that even if the OC says "no" over the phone, that a well-written letter to their HIPAA compliance office pointing out that these should never have appeared on your credit reports will probably get you far. 

[Anonymous]

Oh, and: do go to optoutprescreen.com to prevent any other lurkers out there from popping up because they see activity on your reports.  This has the added bonus of cutting down on your junk-mail credit offers.  Also, I'd send any correspondence about this matter CMRRR - certified mail, return receipt requested.

[Anonymous]

Superb response, thanks. Repying in whole to the 2 messages:

So, let's say just for the sake of argument I'm unsuccessful disputing these accounts and I just settle them. My credit score will:

1. Still be IDENTICALLY affected by them until they disappear completey.

on the plus side...

2. At least they indeed WILL come off 3 yrs from now, not a "new" 7.

thanks again,

James

[Anonymous]

I think the whole thing SUCKS!  The more you try to fix it the worse it gets.  And to think your credit "worthiness" is forever marred by some $9 per hour employee who is empowered to make the decision to assign account to a collection agency.  They don't care cause they make $9 per hour and their credit sucks too.     

[Anonymous]

I don't recommend disputing them.  At least not with the CRAs.  Since July 1st, 2010, you could dispute directly with the creditor. 

I'd start with the original creditor, the doctor's office.  I'd call them and then I'd write them a letter if the call was unsuccessful. 

No, paying them will not affect your score one way or the other.  Yes, they should still drop off in about 3 years. 

[Anonymous]

My largest problem with this "system" has always been the same: the amount of "bad" on your CR outrageously, disproportionately, negatively affects your score than the good.

For me, this means that even suggesting these collections accounts are true,  that a DECADE of otherwise perfect repayment/credit history is comepletey meaningless/weightless, as a credit score of 600 due to these collections is essentially worthless. I mean what does that past "perfection" give me?  A 600 instead of a 500 score? Big deal, as neither gives me access to any new credit anyway.

It's like getting a 45 or 55 on a test. Does it really matter if either is a complete and utter "F"...failure?

It would stand to reason to me that 10 years of perfect repayment vs a 10 months "battle" with ONE creditor would not render me completely and totally impotent from a credit worthiness standpoint, but clearly that's the case.

James

[Anonymous]

So let's get down to brass tacks then: my immediate- read: 12 month situation- is for all intents and purposes: hopeless.

Seeing there's nothing else going on with my CR, there's really nothing I can  do to get much above my current 600.

Further, my chances for a home loan are essentially dashed until "x" number of months elapse and I get the other 50 or so points I need to even consider anything?

Seems to me I HAVE to have these collections...one, five or ten REMOVED immediately somehow, someway if I don't want to get involved in a colossal waiting game.

Also, it also appears I'd be a HELLUVA lot better off if this was a SINGLE $1000 PAID collection than (20) $50 accounts.

I wonder if consolidation is an option with the orgi debtor if the above is true?

LAST: can we estimate how many points can be gained from EACH of these (20) $50 collections if I can have some of all of them successfully removed?

thanks again,

James

[Anonymous]

Focus on fixing this.  Call the OC.  Research the HIPAA letter process.  You need these removed and it seems like you should be able to do this legitimately and relatively quickly.  I know it sucks and that it could totally derail you, but just focus on doing what you have to do to fix it - and please, remember that the person you talk to is going to react better to a relatable "I went through a lot to make sure that this was correct and fully paid and now I'm being punished" rather than "You m-f-ers messed up my credit and I'm going to sue you if you don't fix it yesterday".  Regardless of how un-calm you feel, you need to start *and finish* nicely.  If you hear "no" on the phone, escalate to writing, get proof of delivery, make sure you phrase your problem in a non-aggressive way.  Yes, you have to deal with this before you can get a mortgage.  Yes, it can be done.  Yes, it's frustrating - but just gather yourself and deal with it instead of focusing on the ways in which you're currently screwed.

[LIGHTNIN]

Hi and Welcome to the forums,

For my medical collections, I didnt use the HIPAA process because I didnt know about it at the time.But this is what worked for me.

I used whats called a PFD (pay for delete) letter, its a letter sent to CA's to get an agreement in writing first, before paying for a delete.

It's a win win situtation, the CA's get there money and you get a delete. Woo Hoo !!

Here is a sample PFD letter.....http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/m-p/4519#U4519