Erroneous Entry on Credit Report

[NotSureWhatToDo]

What is the name of your state? MARYLAND

FACTS: Due to circumstances beyond my control, I could no longer afford to keep my cellular phone activated. I deactivated my service, but was told that I would be mailed a bill for $175 for canceling early. Surprisingly, I never received a bill, so approximately one month later, I logged into the company's website using the same username and password that I had used in the past to check my account. The balance read as $0.00.

Six months later, I received a letter from the company stating that I had an outstanding balance which would be sent to a collection agency if it was not immediately paid. The following day I drove to the nearest company store location to settle the bill. A representative there told me to contact the in-house collection department, and provided me with a telephone number. Shortly thereafter, I called the number and paid the total outstanding balance, plus costs, with my credit card. The charge appeared on my credit card statement with a transaction date of November 27, 2006.

About two weeks later I checked my credit report with one of the three major credit bureaus, and discovered that the company had reported that my account was past due. However, according to the credit report, the company reported such negative account information in December of 2006, and thus after I paid the balance in full.

I immediately contacted a customer service representative in the company's in-house collection department and explained the facts as presented above. I was subsequently assured that all negative account information previously reported would be removed from my credit report. I requested written confirmation of that promise, and received a letter from the company about 5 days later stating that my “account has been closed” and that it was “in the process of notifying the three major credit bureaus…to delete any previously reported information” from my credit report.

I don't know how long it should take to remove such items, but I figured 45 days would be plenty for my credit report to be updated. Today I checked my credit report (45 days after receiving the confirmation letter) and found that it still erroneously shows an outstanding balance owed to the company. Additionally, the entry is listed in the Negative Account History section of my credit report.

QUESTION 1: At this point, should I (1) dispute the negative entry with the credit bureaus, (2) write a letter to the company to request that the negative entries be removed, or (3) give it more time because it could take longer than 45 days to remove negative information?

My fear with choice (1) is that while my credit report incorrectly states that I owe the company money, I was late in paying the balance even though I did not receive a bill (my understanding is that sending a paper bill is a courtesy, but not a requirement). Therefore, I am afraid that if I officially dispute the negative entry, the company will correct the entry, but will list it as having been late rather than removing the entry completely, which is what i was assured would happen.

QUESTION 2: Does the fact that I paid the outstanding balance before it was listed on my credit report preclude the company from listing that I paid it late after the fact? In other words, if I made a late payment to a creditor last year, and the creditor didn't report it as late to the credit bureaus at the time, can it suddenly inform them now even though the debt has been settled?

Thank you.

[Ladynred]

QUESTION 1: At this point, should I (1) dispute the negative entry with the credit bureaus, (2) write a letter to the company to request that the negative entries be removed, or (3) give it more time because it could take longer than 45 days to remove negative information?

3 & 1 - in that order. Give it a bit more time and if it's still there, dispute it thru the credit bureaus.They do NOT have to remove the entry at all, they are legally correct in reporting that your bill was past due and it can be reported as once 30 days past due for 7-1/2 years. It's accurate information. If you do NOT dispute thru the CRA's, you are not preserving your legal rights under the FCRA.

QUESTION 2: Does the fact that I paid the outstanding balance before it was listed on my credit report preclude the company from listing that I paid it late after the fact?

No. The FACT is that the bill went past due - period. They can report that legally as I stated above.

In other words, if I made a late payment to a creditor last year, and the creditor didn't report it as late to the credit bureaus at the time, can it suddenly inform them now even though the debt has been settled?

Yes, they certainly can !! If it's accurate information, and you WERE past due, they are legally entitled to report it for the full 7-1/2 year reporting period. WHEN the report it - even a year later, means nothing.

[NotSureWhatToDo]

Thank you for your response, Ladynred.

I have two follow up questions to your post:

(1) When does the 7.5 year reporting period begin to run? When the debt first becomes 30 days overdue, or whenever the creditor decides to first report it? I assume it must begin when the debt first becomes 30 days overdue, otherwise a creditor could hold off on reporting it, only to ruin a past debtor's credit years later. This question isn't really relevant to my case, but I thought of it after reading your post.

(2) Do I have any recourse for the inaccurate reporting of information on my credit report? I'm assuming that an unpaid outstanding balance looks worse to potential creditors than merely a late, but fully paid past balance. As I mentioned in my original post, the company first reported that I had an outstanding balance after it was already paid. If a creditor does report something negative on a credit report, does it have a duty to be accurate, or is it given some wiggle room for "mistakes" (I'm giving the company the benefit of the doubt by assuming it was an honest error).

[Ladynred]

Per the FCRA the 7-1/2 year reporting period begins with the first delinquency that immediately precedes placement for collections, internal or external, and/or charge-off. Generally it's your first missed payment after which you never got the account current again.

(2) Do I have any recourse for the inaccurate reporting of information on my credit report?

Of course you do. Read the FCRA (Fair Credit Reporting Act). You can dispute ANYTHING that is inaccurate on your reports. Put your dispute in writing, they have 30 days to re-investigate and report back to you.