I recently received an email from a reader regarding cleaning up old credit report errors. Here’s the question (my emphasis added):
Does it count as an error on a credit report if there are accounts turned to collections that have actually been paid years ago? When my husband and I were applying for a mortgage, he got turned down because he had supposedly unpaid medical bills–from when he was 19. His parents insurance should have covered the charges, but his mother cannot find paperwork from that far back (my husband is 30 now). The collections agency hasn’t even been helpful when we contacted them for more information. Can we dispute the collections notice on his credit report even if we can’t prove the account was paid?
Here’s a paraphrase of my response:
I think you can claim that this is an error and report it as such. The credit reporting agency will then send the request to the creditor to prove that the account is truly in bad standing. If they don’t come up with proof that you still owe that money then they have to remove it. In other words, the onus is on the creditor to show that it’s valid. I wrote a bit more on this topic here: How to Fix Your Credit Report and Identity Theft.
I also reached out to some other pf bloggers for a response. Here are their replies (emphasis added):
Yes, it’s the responsibility of the collections agency to prove the debt is valid and they must provide written proof on request. Probably the easiest way to go about it is to contact the medical provider themselves and make them prove it. They probably can’t.
-Kyle from Amateur Asset Allocator
Yes, a credit bureau dispute would put the onus on the collections agency, and ultimately back on the medical provider to show proof of delinquent activity. And even if this is a legit collections attempt, at more than seven years old it should come off the husband’s report, unless there has been recent activity (which I doubt for something that far back in the medical field, unless we are talking thousands of dollars).
-Jason from Frugal Dad
The debt is past the statute of limitations of 7.5 years. Therefore the negative remarks will need to be removed, even if there was recent activity. Of course, the laws vary by state, so the reader will need to check in their individual state. Here’s something that might help: Gettin’ Out of Debt: Part II
-Madison from My Dollar Plan
So what’s your take? Do you have anymore insight into a solution? Do you have experience with this issue that you’d be willing to share in the comments below?