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I have reduced my credit card debt from $70,000 to under $20,000 in the last 12 months. I did this by negotiating pay-offs from some creditors and by reducing or eliminating interest charges on others. My credit score had been steadily rising every month and I'm close to negotiating a pay-off on a debt that will get my total indebtedness under $10,000. I was feeling pretty good about myself until recently when one of my creditors that I settled with, sold my account to a collection agency. I have my cancelled check and the settlement letter that clearly shows this debt is paid in full. The debt even shows on my credit report that it is paid in full. The sad part of this story is even the collection shows a zero balance.

The problem is that when this account was sold to the collection agency, even with a zero balance, the CA reported it, and all of the credit reporting agencies consider this a major derogotory and my credit score plummeted about 40 points. I'm not worried about the debt because I've got iron clad documentation and it's obvious the debt is paid. My concern is how do I regain my lost credit score points and continue to repair my credit. Will a credit reporting agency adjust my score if I provide them with documentation showing this debt has clearly been settled?

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