I used to work for FIC on the Falcon Fraud product. I had a FICo score of 815. In 2001 I moved from one city to another in San Diego County. In the midst of our move, I missed paying a chiropractor bill of $60. It was questionable if the doctor ever sent the bill, as ALL of my other mail was forwarded to the new address. I know this because my previous roommate (and best friend) was still at the old address. The doctor sent the item to American Agencies, probably the most notorious collection agency in the world. I didn't find out about the unpaid bill until 2003 when I went to do a routine check of my credit and found that my score was 565. I was horrified. The only negative item was this stupid bill for $60. I called the doctor, American Agencies, FIC, Experian, etc. I tried to negotiate paying the bill and having AA remove the charge-off completely. They agreed. I paid. Then they didn't comply. It has taken the last 4 years almost for my score to crawl back up to 735.
The moral of this story is that the modelers on the FICO side of FIC are friggin idiots. Their models obviously do not compensate for outliers such as the single instance of negative behavior constituting a very low dollar amount. The other thing that is not equitable for consumers is that we are completely at the mercy of credit companies. We have no recourse other than costly lawsuits to force compliance.
In the end, I am sure the doctor paid American Agencies a decent fee to handle my unpaid bill. Maybe $20. So, they reported me and ruined my credit for a $40 profit.
