Can I make an effective dispute of my credit report?
December 9, 2008 9:31 PM   Subscribe

A creditor and I disagree on the amount I owe. Not paying what they say I owe will negatively affect my credit. Do I have any options?

I could write two pages on all the lies I've been told on the phone and all the times I've tried to use their website to make payments (for which I received email confirmations for) that weren't charged. As a result, this creditor is billing me for about $3000 interest which I shouldn't owe.

They will not budge and nor will I. I simply don't owe the money and won't pay it. Eventually, this will hurt my credit, which is my only concern at this point. My question is this: can I dispute their derogatory report of me, and will my dispute make any difference in my credit whatsoever?

My credit score is currently down to 700 because of some other negative reports earlier this year. Basically, I moved overseas and didn't pay off a power and phone bill which were mailed out after I left. I never knew about the bills until they went to collection and even though the total amount was just $300 my nearly perfect credit was dinged substantially.

I should note that I actually don't need any credit nor do I anticipate needing any for a few years. I live in Hong Kong, pay for everything with cash and don't need to buy a house, car, appliance or anything that requires credit. I make a substantial income and have access to a low interest margin account through my brokerage in case I need extra cash.

In a couple years, I'll move back to the USA and buy a house and a car, at which point this account could come into play. Does anyone have any advice on what to do or not to do here?
posted by b_thinky to Work & Money (6 answers total) 12 users marked this as a favorite
This rather timely post from The Simple Dollar blog might lend some insight. Sounds like negotiating with collections is your best bet. Also, as one of the commenters points out, you could be dealing with zombie debt, so beware. Keep a paper trail--document everything.
posted by xiaolongbao at 10:18 PM on December 9, 2008 is a good site to search the archives for and/or ask this question.
posted by salvia at 1:11 AM on December 10, 2008

You might want to bust out a few descriptive paragraphs about what happened when you tried to make the payments - the time frames, what you were told, et cetera.

You obviously can't stroll into one of the places and talk it out because you're so far away. So I would suggest going to a store and getting a folder type deal, and making copies of your documentation along with a detailed chronology, month by month, of what occurred and what you were told. Approximate phone call times and include those there. Mention how long you were a customer with them if it is a substantial amount of time.

You need to get somebody to send it to, of course. If I were you, I'd call their line and immediately just go a head or two above the folks who answer and get a name and contact info for where you can send your documentation.

As you document the issue, document any payments you made, so they can see you paid what you were supposed to pay as these incorrect interest amounts accumulated. Obviously request in writing a notice of settled debt.

I always tell people if you don't owe the money, don't pay a cent. If you pay even $20, then that's saying that somehow you did in fact owe this, and that it can be reported on your credit. If you don't owe it, don't pay it.

However, if this isn't a clear cut issue, and your account never got deducted for amounts you were supposed to have paid, and it kept happening and you just kind of skated along, then you're going to have to think about some kind of compromise. If I were you, I would just turn this into a class project, mail it out with a proof-of-receipt thingie, and wait for a response. Even if you just compile all the documents and fax them 25 pages instead of postal mail, I think it's better than just a few phone calls.
posted by cashman at 8:17 AM on December 10, 2008

If you don't need credit, then let it lapse into collection status. Once in collection, you should be able to negotiate a payoff amount that is in the ballpark of what you feel you really owe. Just be certain to get the agreed upon amount in writing prior to making a payment.
posted by curlyelk at 8:40 AM on December 10, 2008

Since I'm a bill collector for a living, here's what I'd say:

1. Try and get them to break the FDCPA. Catch them doing it. You say they have lied to you on the phone? How or what about exactly? Do they call you before 8am or after 9pm? Do they call you at work even after you've asked them not to? Have they disclosed any of your account information to anyone besides yourself? Have they threatened you with anything and, if so, what? If they lie to you about their name, actions they intend on taking, or your account status, you could escalate this issue so hard and so fast they'd probably just end forgiving you the balance in return for you not turning this litigeous.

2. If your credit isn't that important to you at the moment, stop paying these. Let them lapse, go into collections, and, after about 300 days, it will charge off. At that point, if they haven't already, they will be sold to a 3rd party collections agency. Like one of the posters before me pointed out, at this point, you can negotiate with them and work out a settlement on the account, which will resolve it BUT still show up on your credit report as an account closed and paid off for less than the balance in full. Before you settle though, what I'd do is this;

1. Pull a copy of your credit report for free at You're allowed to do it once a year for free, but if you're really looking to get your credit score back to shiny, shiny perfect, pay the $20 or whatever and get a copy of your credit report from all 3 of the agencies - Equifax, Experian, and Transunion.

2. Find a generic credit agency dispute form on paper. Do NOT dispute anything online. I'll explain why in a moment. Print out 3 dispute forms per every 1 account you want to dispute. So let's say that this account you're about to let lapse is the only negative mark on your credit. Print 3 forms. Let's say that both the phone AND the electric company have put negative marks on your credit. That's 2 accounts, so 6 forms. Get it?

3. So, take those 3 forms for the phone company, fill each one of them out, and say the account is NOT YOURS. Send one account on one sheet to each of the three credit reporting agencies. Send them via certified mail so they have to sign for it. From the day it's post marked, they have 30 days to confirm with the company that gave you the negative mark on your credit that the account is yours. If even ONE of the three agencies don't get the information back in time or can't prove that it's yours, all three of them must remove it from your credit. You'll get a letter from, say, Equifax stating that the company didn't get them the information back in time or that they couldn't provide proof that the mark was valid. You photocopy that letter and send it into the other two agencies - even if they both just sent you letters stating they recieved proof that the negative mark was valid, they still have to remove it from your credit. So if Equifax and Experian get proof but Transunion didn't, you make 2 copies of the letter from Trans, send it to Equifax and Experian, and it's removed from your credit.

4. So let's say all 3 send you back letters stating that they all recieved proof the mark was valid. Repeat steps 2 and 3 exactly the same way. Print off the dispute forms, one account per sheet, one dispute form per envelope. Drown them in paperwork. When you dispute stuff on the net, it's as easy as pointing and clicking to deny your dispute form. You want to tie them up, bog them down. Somewhere, deep within the bowels of some sad, grey building resides a group of people who have to deal with all these paper forms. Recieving them, sending out letters of their own to the companies being questioned, digging up negative reporting tapes and files.... bog them down and make them angry. The goal is to make them so tired of dealing with it all that they just rubberstamp your dispute with a big ol 'Fine, you win'. Seriously, the credit reporting agencies don't care whether the debt is really yours or not, that's not their concern - it's the companies reporting you as retaliation for you not paying your bills that care. So send out your letters again and wait another 30 days. All you need is ONE letter from any of the three stating that the person who reporting you didn't get back to them in time and your mission has been accomplished.

5. Finally, should they all 3 come back a second time stating that the derrogatory mark in question has been proven valid within the 30 day time frame, dispute it one last time, repeating steps 2 and 3 again, but this time, somewhere on the bottom of the dispute form, add the following phrase:

Require Signature Proof

The final ace up your sleeve is this - now, the company has to not only prove that the account is yours and that the mark is valid, but they also need to go back and find the original copy of whatever contract you originally signed with the company signifying that you were committing yourself to a financial relationship with them in which they could report you negatively to the credit bureau if you went over 30/60/90 days past due. They have to make a copy of your signature and that original contract and send that to the 3 agencies. Within 30 days from when your postmarked letter left your house. Why this works so well: most companies file away all their paperwork after a few years, commiting it to huge warehouses god knows where. Almost nobody still has original paperwork on site for longer than 3 years. Most don't even have it for more than a year. The chances of them even caring enough to pull someone off of their normal job so that they can go dig through boxes to find your original application from umpteen years ago is pretty slim. Nine times out of ten, this wins the game.

I can tell you that I pulled this trick on my own credit about two years ago. I went from a low 600 to a near-perfect 800 in two months. *shrugs* If you need any help or if some of this reads as confusing, e-mail me and I'll try to help best I can.
posted by Bageena at 6:05 PM on December 10, 2008 [46 favorites]

Post the details on -- out the b***s. This is surprisingly effective in achieving a company rethink when you have been treated unfairly. If you really have email confirmations for payments that were not charged, you have evidence of the transactions and can not be sued for libel. Consumerist readers are really helpful: you have a lot of experts on that forum, who can help you with disputing the debt.
You should also contact the Better Business Bureau for advice and report the company for their business practices.
posted by Susurration at 6:25 PM on December 10, 2008

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