Credit Reporting and Debt Collection News

A client just received the NCO notice of deletion. He didn’t receive the final bill and he wanted to settle the account.

I advised him NOT to pay because you get NO FICO scoring points for PAYING collections.

So he sent his factual dispute to NCO and they responded by advising that they requested documentation for this phone bill and that they are requesting DELETION of this account from the credit bureaus.

NCO also advised that they will forward any documentation they receive and my client will be glad to settle the account then — if it is not reported on his credit.

As regular readers know, NCO sent me a $2,500 check last year after running my credit.

MOST collectors don’t delete, but they continue to report with the remark that the consumer disputed the account.  Unfortunately, usually only CONSUMERS see that remark as MOST credit decisions are based on credit scores.

FICO scores IGNORE the dispute remarks with collections and continue to rate DISPUTED collections.

Many of my clients WANT to pay their old collections, but unless they need to show paid accounts for a security clearance or job requirement, I can not recommend settling collections.

PAYING reported collections will NOT improve the credit rating and few collectors will delete for payment.

Medical collections are a notable exception as most consumers were overcharged or insurance payments were not credited properly and collectors will often delete IF the consumer properly disputes.

If a creditor promises to delete after payment, be sure to get the promise in writing or at least record the call.

I recently had a client pay almost $80,000 to AmEx to pay his business account in full for deletion of this ONLY derogatory account and reopening his account.

I made several calls to their INDIAN credit reporting center and to the collection department that promised deletion and they assured me that the account would be deleted.  3 months after payment AmEx finally reported the account as a PAID charge-off. And they had reopened his account.

I finally spoke to a supervisor who stated that they NEVER delete for payment.  Of course I told him about my many recordings promising deletion, but he insisted that they don’t delete.  I was foaming at the mouth and ready to spit nails and advised my client that I’d be glad to provide my declaration for a lawsuit.

To my surprise, the next morning the account had disappeared from all three credit reports and my client’s FICO scores were in the 750s — where they should be.   It wasn’t his fault that one of his customers filed for bankruptcy and he had paid back every penny.

We never found out why they deleted, but I suspect that AmEx looked up my websites after my final call.

DOCUMENT promises of deletion by creditors and collectors.

Filed under: collection, Credit Reporting and tagged AmEx, deletion, NCO, settling