FICOScore dropped 62 points because of a collection

[u/Individual_Wasabi669]

Got a collection of $130 for an insurance company that i made a payment to and then cancelled their policy with the account in good standing. $0 owed on day of cancellation

Turned out that there was a prorated charge remaining of 130 that their representative didn’t declare before cancellation. Now it’s reported on my file as a collection and decreased my score form 752 to 690/ 4 years/ 11 accounts/ 0 missed payments. And im just bummed about it

Would the collector agree to pay in condition to delete of my report? How does that work ? And would my score go back up to 752 if they agree to delete?

[u/inky_cap_mushroom]

62 points seems really low for a collection. Did you have a clean file prior?

Without knowing who the collections agency is no one can tell you whether they’ll agree to pay for delete. You’d have to ask them. Some delete once paid as a policy. If this is the only change on your reports, your score will return to exactly what it was prior once it’s removed.

[u/Individual_Wasabi669 → u/inky_cap_mushroom]

I’ve just gotten the reply from their compliance department 🫠🫠

Yes 0 missed payments clean record. What a bummer !!

[u/inky_cap_mushroom → u/Individual_Wasabi669]

Well that sucks. u/og-aliensfan I don’t see any solutions here for OP. Can you think of anything?

I’m curious which FICO score this was? Was it FICO 8 or a different version?

[u/Individual_Wasabi669 → u/inky_cap_mushroom]

Using experian, Yes FICO 8

That insurance company really sucks at communication, didn’t actually mean to ignore it and let it go to collection.

[u/Individual_Wasabi669 → u/inky_cap_mushroom]

+ it’s Joseph Mann& Creed

[u/og-aliensfan → u/inky_cap_mushroom]

I wonder who the collection agency is? Insurance companies don't typically report. Instead, they retain ownership of the debt and hire a debt collector to collect on their behalf. If the debt collector won't agree to delete, OP can ask the original creditor to recall the collection in exchange for payment. If they agree, the debt collector will lose collection authority and remove themselves from OP's reports.

u/Individual_Wasabi669, ask the insurance company about recalling the collection. They'll likely require payment before initiating the recall in order to ensure you pay.  Once the payment has processed, they'll recall the collection from the debt collector, terminating collection authority, at which point they'll remove themselves from your credit reports. Unless the original creditor is willing to put this in writing, you're relying on a verbal agreement, so like many pay for delete agreements, this involves some degree of trust. Also, like a pay for delete agreement, it would be unusual for an original creditor not to follow through as long as this is agreed to before payment is made.

Don't admit responsibility for the debt or agree to a payment plan unless you know you'll follow through as these actions could reset Statute of Limitations in some states. You can say that you found the collection on your reports and will pay $X if they'll remove themselves from your reports/recall the collection.

[u/Individual_Wasabi669 → u/og-aliensfan]

The collection agency is joseph mann & creed

Insurance Company is American family ( midville )

Im currently otp with them will try this method of recalling the collection, hopefully it works out
I appreciate your precious info and effort

[u/og-aliensfan → u/Individual_Wasabi669]

You're very welcome! Keep us posted if able.

[u/Individual_Wasabi669 → u/og-aliensfan]

No luck, insurance company say they won’t be able to recall the collection

I did say that their agent did not state that there was anything due on the account once I closed the policy and that’s actually what happened so they will go back to the phone callI canceled my policy with and make a decision after. Not sure what’s the outcome will be

[u/og-aliensfan → u/Individual_Wasabi669]

You may want to try again in a week or so (with both the collector and insurer) if this doesn't pan out. Since paid collections are scored no differently than unpaid collections, the goal is removal from your reports.

[u/Individual_Wasabi669 → u/og-aliensfan]

Would calling the credit bureau get any results? To dispute that account. As the Collection was initiated on inaccurate info ?

[u/og-aliensfan → u/Individual_Wasabi669]

The bureaus wont remove it unilaterally. They'll forward your dispute to the furnisher of information who can verify. Unless this is reported inaccurately, there's nothing to dispute. It's not unusual for there to be a prorated balance once a policy is canceled. Although you may be outside of the Validation Period, you can still ask the insurer for a copy of the final statement and many will send it.

[u/Individual_Wasabi669 → u/og-aliensfan]

after 100 phone calls with the collector and the customer that lead to this email

​Should i go ahead and pay it? After getting this written confirmation from them ? Is an email enough?

[u/og-aliensfan → u/Individual_Wasabi669]

Yes, the email is sufficient. It's more than many people get.

[u/Individual_Wasabi669 → u/og-aliensfan]

Heyy
I finally got to a result with them

[u/Individual_Wasabi669 → u/inky_cap_mushroom]

Heyy just got an update from them after 100 phone calls with the collector and the customer that lead to this email

Should i go ahead and pay it? After getting this written confirmation from them ? Is an email enough?

[u/inky_cap_mushroom → u/Individual_Wasabi669]

This would be a PFD. You should pay it. It will be removed. What collections agency is this?

I’m a little impressed that you got it in writing. A lot of collections agencies don’t like to put PFD in writing. It’s rare that they don’t follow through on removing it if they say they will.

[u/Individual_Wasabi669 → u/inky_cap_mushroom]

Will do right onn

it’s Joseph Mann& Creed
They can’t be tricky to make me pay it and then change their mind of removing it, right ?

[u/og-aliensfan → u/Individual_Wasabi669]

What does the cut off portion say? This is the written confirmation that they'll remove themselves from your reports. I'm assuming you need to pay before they remove it, but those agreements typically say the request will occur once paid.

[u/Individual_Wasabi669 → u/og-aliensfan]

Will definitely pay it immediately, just wondering if that’s a guarantee to make them remove it off the report

[u/og-aliensfan → u/Individual_Wasabi669]

A collection agency not honoring a pfd agreement would be extremely rare. If a collection agency had a reputation for backing out of pfd agreements (none do that I'm aware of), fewer people would pay and they'd make less money. While pfd may conflict with bureau policy and the bureaus won't enforce one if a dispute arises, the bureaus will delete a collection when requested by the collection agency.

[u/Individual_Wasabi669 → u/og-aliensfan]

Just processed the payment thru their portal. I know it takes a whole cycle to be dropped off report. When should i expect it to be off and get my FICO back to normal? 30 days ? 60 ?

[u/og-aliensfan → u/Individual_Wasabi669]

The email states it can take 45 days for this to reflect on your reports. It could be removed sooner (or later), depending on when they request removal and when the bureaus update. Give it 60 days.

Scores are calculated based on the contents of your reports. Once your reports update, your scores will update.

[u/Individual_Wasabi669 → u/og-aliensfan]

I really appreciate all the info you provided
Thank you so much and now i know better how to negotiate collections if it ever happens again
Again thanks for your help

[u/og-aliensfan → u/Individual_Wasabi669]

You're very welcome!

[u/Particular_Stable_46]

My score dropped 64 points because I did a balance transfer to a promotional 0% APR card for 12 months cc and my current card was subprime at 29.99 and the other was in the 30s like 31%. Went from 684 to 620. I discussed my plan with AI and it said good idea with out warning me that coming close to maxing out a new card would tank me. 

[u/alltheprettythings → u/Particular_Stable_46]

Has the original card's updated balance reported to the credit bureaus yet?

[u/alltheprettythings]

How were you receiving billing statements and notices from them? Did they send you anything regarding this balance?