Recently, my husband and I looked into refinancing our mortgage and found that my credit score, which was well over 800, had dropped to the high 600s. The reason: A debt collection agency reported that we hadn’t paid our children’s pediatrician a bill.
I received calls from this agency in late 2019. They called from different numbers and left no messages. I had to google the numbers to find out where those weird calls were coming from. Since, to the best of my knowledge, I had no outstanding debts, I have not reported.
Finally, in April 2020, they sent a letter asking me to contact them with the pediatrician about an allegedly unpaid $ 90 bill. It turned out that the $ 90 bill was settled in my son’s account. When the pediatrician received my payment, it was incorrectly applied to my daughter’s account. On the phone, the accounting department corrected the mistake and confirmed that I didn’t owe them anything.
They said they would notify the debt collection agency, but I don’t know if that ever happened. I immediately emailed the debt collection agency to let them know that the pediatrician had confirmed I didn’t owe them anything and asked to see if they still believed there was an outstanding debt.
Fast forward to October 2020 and I found out the collection agency improved my credit score. I’ve worked hard for the past 20 years to build good credit. Needless to say, I wasn’t happy that such a small debt that I didn’t even owe it caused such damage. What can I do to fix my credit?
How frustrating that after 20 years of getting everything right your credit score hit due to someone else’s mistake. Unfortunately, this is a common problem. It is estimated that around one in five credit reports contains errors. Many people don’t learn their reports belong to them until they make a funding decision.
The good news is that this should be easy to fix. The pediatric practice admits this was a mistake. If you didn’t discover the bug until October, you may have already taken the right steps to fix it, but your credit reports are not yet reflecting it.
The first step is to get a free copy of your credit reports from all three offices at annualcreditreport.com. You won’t see your credit scores on your official reports, but you can find all of the information that was used to calculate your scores.
Then call the doctor’s office again for more information. When they have notified the offices or the debt collection agency, ask them to forward the correspondence to you. Also, ask that they copy you into any communications they have in the future.
What if they haven’t done anything? Try to stay calm. Errors are occurring and the person on the phone may not be the responsible person. However, it is important to emphasize that this mistake is affecting your refinancing. A $ 90 mix-up doesn’t seem particularly urgent for someone who not only saw their credit score drop by over 100 points.
When you’ve confirmed what steps they took or will take, request a statement confirming that this invoice was accidentally sent to Collections. Then file a dispute directly with the credit bureaus. For templates, see FTC.gov. If you can get a statement, be sure to include it as evidence.
You can submit your dispute through AnnualCreditReport.com. But I would consider sending it by registered mail instead. This will allow you to confirm that your dispute has been received. Include a copy of your credit report with the disputed information highlighted. Send all declarations that you can receive from the doctor’s office to the debt collection agency by registered mail.
Typically, credit bureaus have 30 to 45 days to investigate disputes. Since there is no question of whether you owe this money, they may be able to resolve it faster. If they don’t respond within 45 days, you should file a complaint with the Consumer Financial Protection Bureau.
There is an option that can speed things up if that holds up your refinance called quick rescoring. Basically, a lender can provide the offices with new information and get them to speed up the process of updating your reports. Only one lender can request a quick revaluation on your behalf, and not all lenders offer the option.
Otherwise, it will take time and probably some headache on your part for this to be resolved. But it’s worth the effort once you’ve got your credit back to over 800.
Robin Hartill is a certified financial planner and senior editor at The Penny Hoarder. Send your tricky money questions to [email protected]
This article originally appeared on www.thepennyhoarder.com