Dear Speaking of Credit,
My wife & I visit the FICO Forums regularly. We have recently opened several new credit cards in place of those old start up cards. Seems the reason our score stood low was because we didn’t have enough credit cards with high credit limits. We have a small balance on a few and intend to pay off next month. Just one which we purchased lighting on for $9K. It was 12 months same as cash. Will this ultimately hurt our credit score? It is a legit purchase for our home. We should have it paid off sooner than the 12 months.
Also, we decided to try Verizon in 2013 with their trial period. Paid up front & didn’t like the service, so we canceled. Was sure we would not owe a bill since we paid up front. Never received a bill. Then it shows up on our credit report for $67.00 and a charge-off???? I have proof it was paid from my banking institution. Not sure how to dispute this type of information. I have tried before but there is nothing that resembles this for a dispute. Now showing zero balance but never has been a charge off!!!
Can you tell us how to go about getting this off of our credit? Seems very unfair to do to someone. Thank you. — Warren
Sorry about your trouble with the Verizon bill, but I have to say it warms my heart to know you’re hanging out in my old FICO Forums neighborhood! I’m sure you and your wife have learned a lot from the many knowledgeable people there.
It sounds to me that, from what you’ve described, there are two accounts that are hurting your credit score. One that, if paid in full within the year as intended, will solve itself and another that is going to take some work on your part to resolve.
For starters, I’ll address how the $9K lighting purchase you put onto (I’m assuming) a store card at zero percent for 12 months is likely to be affecting your score. Since store cards are included in credit utilization (balance/limit percentage) calculations, along with credit cards, I’m guessing that the $9K balance is taking up a good portion of that card’s credit limit and, depending on how you pay it over the 12 months, is likely to continue contributing to a higher combined utilization percentage than you’d otherwise be seeing. As you pay that balance down that percentage will go down and help your score a little at a time. Then once you’ve paid it off, be sure to leave the card open so that its zero percent utilization can continue to exert a positive influence on your score well into the future.
As for the Verizon paid charge-off, when you say it’s now showing zero I hope you mean that $0 due is what’s showing on your credit reports, because, while a charge off is never good for your score, a charge-off with a balance can be much worse. You’ll now want to get to work on removing any reference to the charge-off from your credit reports, which you can start by first obtaining your up-to-date credit reports for all three credit bureaus and then by contacting Verizon.
My best suggestion for dealing with Verizon would be to contact either someone with whom you’ve had contact in the past or their customer service department and insist on speaking with a supervisor or manager. Hopefully, you’ll be able to speak with someone who has the authority and ability to fix the error and explain that, since you paid ahead and had not received a bill or any notification after canceling, you had every reason to believe the account had been paid as agreed. Also, be prepared to provide the date and proof of your $67.00 payment, along with any written terms of their trial offer showing what was being charged for the service.
If you’re able to get some verbal agreement from Verizon that the reporting does not accurately reflect how you managed the account, request a confirmation letter indicating their intention to correct this error. Such a letter will be very helpful to your cause, though, all will not be lost if they are unable or unwilling to provide it.
The next step will be filing a dispute with the credit bureaus via certified mail (return receipt requested) that includes:
- A very brief letter explaining how the Verizon account is not being reported according to how it was paid
- A copy of your credit report with the Verizon charge-off highlighted
- A letter from Verizon indicating their intention to correct the error at the credit bureau (if possible)
- A copy of your bank statement showing the payment date
- Any Verizon documentation showing the terms of the trial that will support your case
Also, send Verizon a copy of everything you send to the credit bureaus and allow about 30 days for the credit bureau dispute process to run its course.
If your request is denied by either Verizon or the credit bureau, you still have some options, such as contacting the National Association of Consumer Advocates, who can give you some further advice and filing a complaint with the Consumer Financial Protection Bureau, which will forward your complaint to the credit bureau and ask for a response.
I hope this helps. Let me know how it goes and if I can help any further.
Have a question or comment? Let’s hear it!