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Collections Law/OC reporting after settlement


Settled with a CA representing a bank.  The agreement states that my lump payment I made to them will "settle the account in full".  There is no other pertinent info on the agreement.

It doesn't indicate how it will be reported to CRAs.

What would they legally be required to report to CRA per this agreement?

What recourse do I have if the bank does not report it settled and a zero balance?

There is no law that requires them to report anything, but that doesn't mean you don't have rights. Federal Fair Credit Reporting Act details what must be in a credit file if anything is reported. It must be factual. What they are reporting now was factual when they reported it but it is now osolete.

Heres'e what you do:

1: Send a letter to the CRA disputing the Trade Line (TL) as inaccurate. Say no more.

Once you do that the Credit Reporting Agency (CRA) must check with the creditor who place dteh Trade Line. The Creditor can do one of three things:

A: Do Nothing - don't respond. That would be the best outcome. If that happens the CRA muist completely delete the TL.

B: Correct the TL to read "Paid" or "Settled".

C: Re-verify the existing TL as accurate.

2: If they do C you have a Private Right of Action against the creditor for deliberately misreporting your status. Sue them for $1,000 Statutory Damages and see how quickly they either update correctly or completely delete the TL.

For information on how to sue a creditor, I set up Debtorboards ( It is completely free. Pay a visit.

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Steve Katz


Debt Collection, Credit Reporting, FCRA, FDCPA, TCPA issues


Founder of Debtorboards, co-author of Debtsmanship, former Collector, Credit Counselor


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