I'll pay, I swear. Just don't hurt my FICO!

April 3, 2007 12:23 PM

Is there any way to stop a $50 collection action from dinging my credit rating?

A few months ago, I went to the emergency room. My insurance has a $50 copay for such things. Somehow, despite the fact that all my other, much larger, bills are paid on time every month, this one managed to slip by to the point where I just got a letter from a collection agency. Apart from being slightly mortified, I'm concerned about my credit rating, which is currently quite good.

I'm wondering what the best course of action is here. I have 30 days to write to the collection agency and dispute the collection. Can I find an old copy of the bill & pay it directly to the hospital, then dispute the collection? Or should I pay the agency quickly? Or something else?

The hospital did take my SSN, and my girlfriend has a collection action on her credit report for about the same amount, so I know they can ding me if so inclined. It's absolutely not a matter of being able to pay the bill -- just credit damage control.

posted by Turd Ferguson to Work & Money (15 answers total)

datapoint: When I was dealing with something similar, I spoke to the collection agency about this directly. They told me that as long as I agreed to pay it (and they received the money in a reasonable amount of time) that they would not report it to credit agencies. I haven't checked my credit report since then, however.
posted by needs more cowbell at 12:33 PM on April 3, 2007

In my experience with a somewhat similar situation, once it went to a collection agency, the hospital wouldn't accept payment from me directly - I had to pay the collection agency. But, like needs more cowbell, they agreed not to report it so long as I paid it in full by a certain date. I did and it hasn't shown up on my credit report.
posted by curie at 12:39 PM on April 3, 2007

I believe that the dispute process is supposed to be limited to errors on their part, and thus since you admit that you didn't pay the bill, you can't dispute this.

If you haven't done so, check your credit reports at annualcreditreport.com (not freecreditreport.com) to see how this has affected your them, if it has.

Paying the bill is probably the fastest way to fix your credit. Remember that bad marks go away with time (and this is a small one), so it's not like your credit is forever tarnished. If there is a bad mark, and you are not looking to make a big credit-needing purchase right now and don't carry balances on your credit cards, then a ding right now doesn't even matter.
posted by epugachev at 12:50 PM on April 3, 2007

IHNBITS (I have not been in this situation) but I do recall reading that the LAST thing you want to do is pay the bill upfront, no questions asked. You should atleast talk to all the involved parties (collection agency first) and ask exactly what your options are to prevent this from hitting your credit raiting.
posted by mge at 12:50 PM on April 3, 2007

I would contact the hospital billing department. Show up if possible, money in hand. Explain the circumstances and how it was a mishap and ask them to pull it from the collection agency. They are the ones that write things off to the collection agency - they have a liaison that deals with them. That person(s) should be able to pull it from the collection agency. You just need to make it clear that this was merely an oversight and should never have been sent to collections.

You could pay the collection agency upon condition of not reporting on your credit, but I just do not trust collection agencies. Those folks are ruthless.
posted by cashman at 12:55 PM on April 3, 2007

You have a legal right to request validation of a debt within 30 days of notification. You should do so.

You also want to use a LIMITED cease and desist on them, informing them that it is inconvenient to discuss this matter on the phone and all contact with you needs to be via mail. DO NOT TALK TO THEM ON THE PHONE. Nothing good ever comes of that.

DebtorBoards.com will have more specific advice on dealing with collection agenties.
posted by phearlez at 12:59 PM on April 3, 2007

Addendum: I've never had reason to get my FICO score, but I just checked my credit report with 2/3 of the major agencies, and neither has anything about my formerly past-due bill(s), which I paid in November 2006 after a few months of delinquency.

I had two bills past due, each for around $200 (workman's comp deal that wasn't handled properly by insurance or by me--I stupidly signed my own name as the guarantor of payment at the emergency room instead of making my boss come in and do it.)
posted by needs more cowbell at 1:00 PM on April 3, 2007

Chances are, the collection agency hasn't reported the debt to any of the Credit Reporting Agencies. Call them, and tell them you will pay but that you want absolute assurance that this oversight won't be reported to the CRA's. You really should be fine. All they want is their money. If the letter from them is a first contact, then you almost certainly don't have anything to worry about as far as reporting. Just don't let much time go by.
posted by Gerard Sorme at 1:23 PM on April 3, 2007

I'm nth-ing the idea of paying while asking the collection agency not to report it. I just want to add as well that if your credit is overall very strong, even if this one late payment is reported, it's not the end of the world. At different times in my life while applying for mortgages or other major credit, I've been asked to provide an explanation for things on my credit report, like an occasional late payment. This has been really easy to provide and readily accepted, and has done me no harm.
posted by not that girl at 1:34 PM on April 3, 2007

Just pay it. They won't report it (and have no reason to) if you just send them a check in a reasonable time frame.
posted by bradbane at 1:43 PM on April 3, 2007

"They won't report it (and have no reason to) if you just send them a check in a reasonable time frame"

Oh yes they can and they sure will. Then they'll claim that they can do nothing about it.

The best idea is to go to the hospital with the $$ in hand and deal with them directly.

Collection agencies are made of pure slime. Never trust a goddamn thing they say. Get everything in writing, and never deal with them over the phone. That's an entire industry that needs to be shredded into pieces and rebuilt.
posted by drstein at 1:52 PM on April 3, 2007

Pay it, but before you pay it, have them send you something in writing saying that they will not report it to the credit bureaus. You have the $50. They want the $50. You have the upperhand.
posted by donajo at 1:54 PM on April 3, 2007

Make sure that you get in writing from them that they will either not report it to the CRAs or will delete the entry entirely (not mark it as paid, which does no good).

Better yet, deal with the hospital directly. Creditboards.com has a forum with a medical collections section which is exactly what you need in this situation because you can use HIPPA to force the hospital to deal with you (and remove any derogatory information from your report). Essentially, you send them a check with a letter noting that they need to cease communicating with other parties (beyond calling the dogs off) regarding your medical history.
posted by wierdo at 2:35 PM on April 3, 2007

The best idea is to go to the hospital with the $$ in hand and deal with them directly.

I don't know all the specifics of this situation, but in most circurmstances, this advice is incorrect and not even possible. Assuming the debt it legitimate, it's likely that the debt collectors purchased the debt from the hospital, in which case you no longer owe the hospital money. You owe the debt collectors.

This just happened to me last week. I switched from AT&T to Cingular and thought all my bills were transfered over with my new service (it's the same company, after all). It turns out I owed AT&T $40 from my final bill. I called Cingular/AT&T, confirmed this with them and mailed a check to the debt collectors the next day. Several days later, the check was cleared and nothing was reported to anyone. Typically, they're going to threaten you with staining your record before they actually do it, in an attempt to get you to pay.
posted by dhammond at 9:25 PM on April 3, 2007

" this advice is incorrect and not even possible"

It's very correct and very possible, especially with hospital bills. You can always negotiate with the original party.

Now did you get a letter from AT&T's Accounts Receivable folks or from some unrelated debt collector? AT&T has an entire department that will send out "collections" looking notices, but they are not a collections agency. Chances are, that is what you saw and you were not dealing with a collections agency.

So in that case, you did exactly what I suggested - you paid the original party, which was AT&T.

I used to work for AT&T Wireless and dealt with that stuff every single day.
posted by drstein at 11:47 AM on April 4, 2007