Credit reporting / collections question?
So I am trying to buy a new car only to find out that my 700 credit score is now a 640 because there is some $8 past due owed to some collection agency I have never heard of, or heard from. It may be a mistake but assuming it is not what can I do? I feel like it is insane that 8 dollars can throw your credit score off by 60 points, and the fact that no one ever contacted me about a past due amount for 8 dollars leads me to believe maybe I can have my credit amended. Anyone with any insight and advice to give would be greatly appreciated thanks!
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8 dollars? Pay it off, simple. Obviously your credit bureaus aren’t lying to you when they reveal your scores. Furthermore it’l probably cost more to actually fight the case and ask for a rebuttal service. Also I’ve been trying to think how you might not have been able to see this 8 dollars get by you, perhaps its a late library fee? Good luck anyhow
I believe the amount is not worth your while to go for a dispute. However, if it is a matter of principle, then you can opt for a dispute; but it will take some time since there are procedures to follow. If you want to get that car soonest, the best is to settle the amount and get back your score in due time.
Actually, just paying off the $8 won’t immediately fix your credit report/score either. Creditors have a pretty lengthy time frame for when they have to report the payment (I think it’s at least one month but could be up to 3–6 months, but I don’t remember completely). So even if you pay it off today, you’re credit report and score may not be fixed for a bit.
If you are really concerned that it is an error, call the collection agency and ask them for information about the debt and a verification letter. If the debt is yours, pay it. If it’s not, dispute it and go from there.
Even if you pay the debt, it’ll be a negative mark on your credit report for years to come (because the account was late and went to collections), so if it’s really not yours, it’s best to dispute it and have it removed completely rather than pay it off and leave the mark on your credit report for the next few years.
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Talk to the lender and tell them what you have told us, then submit your dispute report to the credit company.
The lender usually has a lot of leeway when they decide if you are a good credit risk. They don’t use just one source.
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