Expert: Yan Ross - 4/19/2009

Question
I have been working diligently for the past three years trying to rebuild my credit after years of youthful carelessness when it came to paying my bills.

Back in the winter of 2002-2003 I had a car repossessed that I had financed through a second tier auto finance company.  As I have been doing my research with the credit bureaus and other forums and various resources I learned that the repo is due to be removed from my credit report around February of next year which would be 7 years after the account first went delinquent.

I tried disputing ownership of the car loan as directed on other sites as they say it might just get dropped earlier if they did not have paperwork to back up their claim such as a signed contract.  It was resolved almost immediately by the three credit reporting agencies as being verified.  It was so fast that I am sure the finance company did nothing more than say "yes, he owes us money" and that was the extent of the investigation.

Well, as directed by the credit bureaus I sent letters to the finance company trying to get proof of the account from them and all of my requests have been ignored with no response at all.  My requests were sent to a P.O. Box as they will not provide me with a physical address so I can send it certified mail and I have been unable to find it on my own.

More recently I have checked my report and checked the detail of the account and noticed they have no mention of the car ever being repossessed whatsoever and the balance owed being $0.  But they also over the past few years have reported it as 'pays as agrees' until they recently listed it as '120 days late' back in June.

I believe this is an attempt to re-age the debt.  They report every month and I receive an e-mail saying the account has been updated(I ave an account for monitoring with Equifax).  Usually it says something like 'account balance has been changed from $0 to $0'.  Which makes absolutely no sense to me.

On the report itself it says it is a 72 month installment account that has been reported for 84 months.  The status says it is a collections account but it also says it is a paid collection and I have never paid it off.  It was last reported just last month so they are actively updating it.

Can i have the account removed based solely on their illegal reporting tactics?  And is it illegal reporting tactics?  From all that I have read on the subject it seems they are up to some funny business.  And also would like to know how I go about getting it removed based solely on their refusal to respond to my requests in writing.

Answer
Doug,

While I can't give you a legal opinion on the issue of a possible "illegal" attempt to re-age the debt, I can make several practical suggestions.

First, since you already have a relationship with Equifax, contact them through the channels for your customer account for monitoring your credit report at Equifax.  Ask the customer service rep for the meaning of the "changed from $0 to $0" notation.

Second, you may continue your attempts to have the account removed, but in the meantime, you are entitled to write and have included in your credit file a 100-word explanation of the account situation; this statement then must be forwarded along with your credit report to anyone who requests it.

Third, you might finding the corporate headquarters of the finance company or its parent (many are publicly traded companies0 that list the subsidiaries in their annual SEC reports).  I agree that sending a certified communication would strengthen your hand in demonstrating to the credit reporting agencies (Equifax, Experian, & TransUnion) your diligence in resolving the disputed matter.

I recognize that you face an irritating and frustrating situation.

If you are currently applying for credit, I would suggest that you also provide copies of your correspondence to the lender where you are applying, as they may take your factual dispute into account rather than depending solely on your credit score.

If you have more facts or other input, you may follow up with another question.

Good luck!