Expert: Apex Credit Services, LLC - 12/22/2007

Question
I have been working really hard for the past two years to fix up my credit after many mistakes when I was very young. Two months ago I had my FICO score almost in the seven hundreds, with seven open occounts in good standing, and 4 $0 balances.
This morning I checked my FICO and it had dropped back down into the high five hundreds. I looked at my credit report and found that a debt collector had bought an outstanding cell phone account from 10 years ago, and reported it as a new debt. There has been no collection attempt, so I didn't even know about the debt. Is this legal?

I wouldn't mind paying the debt if I actually owe the money, but I feel this is really unfair practice. I don't trust a company that uses these practices to do the right thing and take the negative mark off my report if I pay them. Plus, as far as I know the debt is well past the statute in my state (MA).

Will paying them do any good? Could paying them do more harm than good?

Thanks.  

Answer
Ms. Jeffrey:

    This practice is far to common with respect to debt purchasers.  That is too say, that instead of reporting the true date of major first delinquency, they instead report the date the purchased it.  They also report their accounts as "open" account types and "120 + days past due."  Both instances are illegal under the FDCPA and if you dispute it through the credit reporting agencies as such and they subsequently verify it, the FCRA as well.

    My advice is to request validation directly from the debt purchaser.  This will estopp them from any future collection activities until they provide validation insofar as your communication would properly be considered the "initial" communication.  Moreover, I would dispute the account tradeline through the credit reporting agencies based upon what I mentioned above.

         Apex Credit Services, LLC