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Pegger16

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1 Negative Item affecting Credit significantly
I had immaculate credit. 785 to be exact. Then I got 1 negative item on my credit report, a medical collection of $116 and my score immediately dropped to 685. I have 4 credit cards I have always paid on time, I have a mortgage for 8 years that I have always paid on time. This is my only blemish.

I sent a Pay for Delete letter because I don't know what this is for and I'd rather just be done with it. However, it's been a month with no response. I am going to go through debt validation next.

All that being said, I have a few questions...

1) Will my credit rise on it's own as the debt gets older? Will I have to wait 3 or 6 months or would it increase each month in small increments?

2) Should I call the collection agency to see if they actually got my PFD letter? I made the mistake of not sending certified so I am unsure of it's receipt.

3) Will my credit rise if I pay the debt off? Will it happen immediately and what type of points can I expect?

4) I am asking these questions because I am going to sell my house and get a new mortgage in 3 months or so. Am I missing any other avenue to fix this issue? 3 months is not a lot of time with the credit system set up the way it is.

Any help would be greatly appreciated. So hard to cut through the nonsense and get to straight answers on this stuff.

Thank you!

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Best Bet: Have the Collection Removed

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Hi Pegger16,

In your first paragraph, it sounds like you may not know what the medical collection is for.  If this is the case, contact the 3 main credit bureaus (Equifax, Experian, and TransUnion) to dispute the record.  You can do this on their websites, but in my experience, it was easier to call.  It's then the bureau's responsibility to contact the collection agency and verify the account is valid.  I believe the collection agency has 30 days to provide proof that it is your account, but I could be wrong on the timing.  If the agency can't validate the account, it will be removed from your file.  You'll receive a notice of the progress and final decision by mail from each bureau.

If this doesn't work, and the collection is yours, there is no harm in contacting the collection agency to see if they will have the account removed if you pay.  To be honest, this never worked for me, but I've heard of it working.  

Worst case, you pay the bill (or don't) and it remains on your credit for 7 years.  To answer your questions above: (1) your credit will rise over time as the debt gets older -- though not by much -- as having a collection account on your file will prohibit you from having excellent credit until it dropps off.  (2) Call the collection agency first before disputing with the credit bureaus.  They have the ability to contact the bureaus and change the account from collections to in good standing, though not all will do this.  (3) It may increase your score slightly, but again having the collection account on their is way more damaging than its paid status.  (4) Contact the bureaus to get the ball rolling on the dispute.  

Hope this helps.  Good luck!

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