I’d Like to Collect Things, just not Collections

My credit report has been affected by a medical bill that my father was supposed to pay (as stated in a divorce decree) the amount of the bill is $301. I was told not to pay it yet and dispute the bill, using the decree as proof I was not to be billed for this emergency room stay in 2005. I spoke with the FTC on the phone today- and they said that the credit bureau does not care that my father is supposed to pay the bill. The fact remains that my name is on it, its past due and therefore I should pay.

I am trying to take out a loan to pay for the rest of my college education (one class left! I got a full time job just so I could get a income-to debt ratio). I have been turned down by a few banks (including salliemae) because I already have a few loans (3 private and 2 Federal Student loans) 3 are in forbearance. I plan to consolidate IMMEDIATELY after I get this last loan so I can get my BA and get a raise where I work.

 I am taking the loan out with my employer’s federal credit union because I was told that would be my best bet now. I disputed the hospital bill online with experian, who returned with another credit item of $41 dollars for a library book that I apparently took out in 2002. I am not sure whether to pay first, then dispute or first dispute, then pay. I am applying for this loan as soon as April 10th – I would assume  there would be no way to remove any negative items on my report. The last time I checked my score a year ago it was 550. If youre only supposed to look at your score/report once a year how do all these people know they have raised their score within 2 months?

I also dont know if the idea about me not being responsible for the medical bill is valid. Please let me know what the best course of action would be. Also, whne I apply for this loan my father (who has bad credit) has offered to co-sign. Would this ultimately hurt my chances? You seem to give straight answers compared to the ones I’ve been getting. So thank you in advance for this service. Also feel free to let me know if I have little to no shot at getting this loan. I was told it would cost extra to view my credit score-and I dont know what the cut-off score is for this loan anyway). My parent’s credit is a disaster and it has greatly affected my life. I dont want that for myself so I am trying really hard to learn as much as I can to improve my score and interest rates. Please let me know if you have any advice for this situation.

Clark

——————-

Hey Clark,

I agree with the FTC’s response, as a divorce decree is not binding on the creditor.  The quickest way to get rid of these two collections is to explain your situation to the collection agency and get a written confirmation for a pay for delete.  Otherwise, paying an old collection will most likely reduce your credit score. 

What you want to do is to see if a friend or relative can add you on as an Authorized User to an existing credit card.  Perhaps you or your father know of someone that can help in this regard. 

In any scenario, you will not be able to accomplish these tasks and have them updated at the bureau level by April 10th – so that’s the bad news.  The good news is that a pay for delete on the two collections and the addition of a healthy AU tradeline can easily add 100 or more points to your credit score in the next 60 days.

Hope this helps and thanks for the questions.

Paul

P.S. The annualcreditreport.com report is the ‘once per year’ free credit report program made possible by FACTA.  Now, that doesn’t mean that you should only check your credit report once per year.  We tackle one job at a time here on the Broken Credit Blog and I’ll settle for consumers at least being proactive enough to check their credit reports before applying for something major.