Question:

Can I remove a medical collections from our credit report? It has been paid and it is our account. I didn’t know that it had been reported. I did call the collection agency and was told by law it could not be removed unless there was a mistake.

I was told I could dispute it by written letter and to fax this letter to the representative and they would take it to their arbitration department. Is there ever any circumstances to warrant removal? Was I given the correct information from the representatives? And if I try to dispute it on the grounds of personal circumstances and I lose, will it hurt me more?

Answer:

First, you need to understand that the big three credit bureaus ‑‑ Equifax, Experian and TransUnion ‑‑ maintain credit files on individual consumers in this country, not joint credit accounts.  Now, it may be the case that this medical collection was an account for which you and your spouse both assumed liability and therefore the collection account is showing up on your account as well as your spouse’s account, but I just want to be clear that there is no such thing as an “our” or “we” when it comes to credit reports.

You stated that you did owe the account and that you did pay the account. Just by paying a collection account does not and will not automatically remove it from your credit report. Negative information such as a late payment or collection account under the Fair Credit Reporting Act can remain on your credit report legally for up to seven years.

Now, you said that the person told you that by law it cannot be removed unless there was a mistake. No, that is not accurate.   It’s within their power to remove anything that they want to remove. This goes for a collection agency, a medical institution, a hospital, a collection agency, a creditor, a credit card company, etc. Frankly, the incentive there is less at this point since you’ve already paid the account. You’ve already given them the cold hard dollars that they were seeking and so a bit of your leverage in getting them to remove that medical collection account from your credit report has been lost.

I am always telling consumers, if you are going to pay and settle up on an account that has been past due, that one of the things you should ask for upfront is that your creditor or your collection agency agrees beforehand and in writing to remove all negative information from your credit reports. They won’t always agree to do this but certainly if you ask for it, you have a more likely chance of getting it done if you try to request it and get it in writing upfront.

With regard to them disputing it or with regard to you disputing it by written letter and faxing it over to their arbitration department, I would go ahead and follow the course that they’ve recommended but again, there is no requirement under the law that they remove this information from your credit report. It’s just a matter of them looking at your circumstances and trying to say: “Ah, the person did pay after X amount of time!” You didn’t indicate how old or how past due this account was, so it is really going to be entirely at their discretion.

You said if you disputed on the grounds of personal circumstances and lose, will that hurt you more? No, it won’t hurt you more but it could potentially hurt you more if you try to dispute it with the credit bureaus and then you enter a statement, something called a “consumer statement”, on your credit report.

Generally speaking, I advise people not to enter a consumer statement on your credit reports, because those kinds of statements which do tend to reflect some element of your personal circumstances, that is: “I was sick, ” “I couldn’t work, ” “I was out of a job, ” “We had big medical bills, ” “We had credit card debt.”… Whatever it is you are trying to explain in terms of your personal circumstances, is essentially just an admission that you did in fact not pay as agreed and that the creditor was correct in reporting your tardy payments.

So, don’t add a statement to your consumer file and this is not something that you can legitimately dispute with the credit bureaus themselves. You can try to go directly to the medical collections agency and see if they would be willing to remove it on some other grounds. The fact that they have said: “Unless there was a mistake, ” tells you upfront that they are going to take a pretty hard line position on this. You already know that there was not a mistake because you indicated that it was in fact your account.

So, good luck in managing your credit in the future and I hope this information has been helpful to you in terms of knowing what can and can’t be reported on your credit report.