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Comment by mcntsh | Hacker News Reader

I've been working since I was 16 years old and I've had sparkling credit my entire life. I pay my cards in full every month; never missed a payment for 10+ years, paid off my car early.

I moved abroad and forgot about a $30 dollar balance with AT&T which brought my FICO score to 600. One 30 dollar bill means I can no longer qualify for a mortgage or a car payment or anything.

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A grey-hat method of dealing with this would be to dispute it with Equifax, TransUnion, and Experian and choose a plausible dispute reason ("I never knew about it" or whatever). Regardless of the merits of the claim, it's likely their "investigation" will resolve in your favor and they'll just remove it (and your score will bounce back immediately).

It doesn't necessarily feel great... but remember that you're literally just a number that they couldn't care less about.

At some point, when a system is so broken and unjust, I think it's no longer unethical to exploit it given the opportunity

When was it ever just or working?

If this doesn't work, submit another dispute around Thanksgiving - the creditors have 30 days to respond before it's automatically resolved in your favor. In my experience it does actually feel good to do this.

I doubt this would work. Credit reports are for lenders, and credit bureaus side with their true customer.

The FCRA requires them to prove you owe the debt. Debt collectors often can't do this, especially if your debt has been resold - these are often resold as an Excel spreadsheet.

YMMV but it's worked for me.

When I was going through the mortgage process, my broker recommended a credit repair company, whom I learned had three broad purposes (the reason I mention this is in point three):

1. Relieve the psychological / emotional stress of debt collectors hounding you by redirecting that to them.

2. Offering to settle debts. Realize, though that "Paid in full" and "Settled in full" are different statuses to a CRA. And both have an entirely negligible impact on improving your credit score - the damage is done when the negative tradeline is reported. HOWEVER, for mortgages, there's some merit in resolving this. "Yes, it got to that point, but I did take care of it" is better that "Yes, it got to that point, and then I continued to ignore it."

3. How do these agencies also "improve" your credit? They dispute every negative tradeline, regardless of accuracy. If the tradeline isn't verified (because smaller/more manual agencies don't have the time/inclination, especially if they've got their money now), it is removed, like it never happened. If it IS verified? They dispute it again. And again. In the hope that at some point the creditor will fail to meet the verification requirements. Nothing magic.

credit scores recover quick

you could cause six figure loses to a bank by short selling your home and still have workable credit within 2 years

I declared Chapter 7 two and a half years ago and I currently have a score in the mid-700s. Granted, my bankruptcy was due to medical stuff rather than irresponsibility.

That's awful to hear, hope you're doing better now.

My fortunes have improved dramatically, mostly due to the pandemic, ironically.

I need remote work and have some background in Instructional Design. I'm FAR more valuable now than I was 3 years ago. Odd how that works.

I've had a similar experience when changing mobile provider. For whatever reason it seems like that last bill posts late and never shows up. In the past I didn't have autopay turned on so I just didn't even know about the debt until I started getting letters from collections firms 6 months later.

I imagine that these last bill things end up dinging a lot of people's credit. Luckily I've paid them when I find out about them and my credit bounces back once the payment in full is reported.

I had a similar thing happen to me. I disputed the charge via Credit Karma, explaining that the service never worked so I never paid. It was removed within a few days.

for me it was AWS/DO billing. I lost the original phone number/email attached to it which makes it impossible for me to login to that account.

I just no longer rely on credit or use credit cards anymore. I buy everything with cash.

Funny enough my bank is constantly calling me that they can lend me money.

Our modern Credit/interest/rent system is parasitic at best. In some cultures, it is deemed immoral and outright banned. However I don't know what the alternative is. Who would lend money without any expectation of return? Who would buy bonds if they cannot sell it for a higher price?

Pay it off. Wait a month. You'll be fine.

It went to collections. That stays on your credit for 3-5 years.

Other creditors are worried you would move abroad and forget to pay them for years.

For sure it's a valid concern and warrants a mark on my record probably but a 30 dollar bill after 10+ years of pristine activity basically removing my ability to take out a loan is a little unfair.

That's actually not true. If you pay the collection agency, the derogatory mark gets removed within weeks. You also typically only need to pay half the amount. If they try to get you to pay the whole thing, just tell them you're using your tax refund to pay off debts, but you only have $X left, where X is half the amount owed.

That’s not my experience. The only derogatory items on my credit report are medical debts I have long since paid off.

You have the legal right and ability to remove any mark if you've paid it off. Both of the agencies have online options for removal requests.

https://www.experian.com/disputes/main.html

https://www.transunion.com/credit-disputes/dispute-your-cred...

Incorrect. Pay it off in full. They will report that to the credit folks and it will be removed.

This is patently false. They will remove it if they are feeling particularly jolly when you call and ask. But they are under no obligation to do so and they have denied this action to me before.

They do have to mark it as paid at least under the FCRA if you are in the US.

I’ve been in this situation and you can make repayment contingent upon deleting the negative remarks. As in you send me a letter certifying you’ll delete the remark, and I will remit payment.

If they refuse then you can just refuse to pay until they relent. Their only alternative is to take you to court or sell to the next collection agency down the line. Creditors and collection agencies won’t take that action except as an absolute last resort.

One of the challenges with this is that technically the TOS between a creditor and the CRA forbids the practice of "pay for delete". So you may get lucky, but oftentimes, you may not.

Rephrase: my credit was a disaster in my 20's. I paid off dozens of collections accounts in my 30s. All of them were removed.

My personal experience has been that it is 100% true that, if paid in full, the item is removed.

Better?

This is incorrect. They do not have to remove it. They can, if you ask nice, but they do not have to.

This is a bit misleading. One missed payment doesn't lead your score to drop by so much. I'm assuming you never found out about it and it went to collections because you never paid the bill for a year or more.

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