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$29 mystery "student loan" from 5 years ago showing on credit report


louie468
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So I just wrote a crazy long post detailing the situation and the series of events that have ensued. It was so long and detailed I figured I would probably lose half of my potential readers/advisers, so I am going to post a summary. I saved the original post and would be more than happy to send anyone who is interested a private message with the full thing if you think you can help and need more details, or if you just want to know more.

In a nutshell, I went to a technical college 5 years ago. My parents paid in full, out of pocket. Never took any type of loan or aid. Zero. Pulled my credit report for the first time in a long time, and I have an adverse account from this school, listed as "Loan Type: Student Loan", in the amount of $29. Yes, twenty-nine dollars. It has been reporting as 120 days delinquent for 10 months. I have called the school 4 times, and the collection agency they passed it off to once trying to get this resolved. Yes, that is correct too. They really did pass off a $29 balance (cost over $10,000 to attend this school, once again, paid in full) to a collection agency. They haven't been able to provide any type of explanation for the outstanding balance to this point. They are pulling some records and are supposed to let me know tomorrow. However, I know this doesn't really matter. Based on the numerous conversations I have engaged in with them, their official response will almost certainly be that they stand behind everything they have done and cannot / will not change anything.

I have had other debts over the years, and creditors/collection agencies have never had any trouble finding me. I assure everyone that when I saw this on my credit report last week, this was the first I had heard about this $29 balance. They claim they did their "due diligence" in attempting to collect this outstanding balance...whatever that means in their world. I find it hard to believe they did more than place 1, MAYBE 2 phone calls to collect a $29 balance when I am sure they have hundreds or thousands of accounts owing multiple thousands of dollars.

Basically, they are not going to do this the easy way. I am sure they are hoping I will give in and admit the debt by paying it. This way they don't have to report the mistake to the credit agencies and do "extra" work. What they don't know is that I am willing to take this as far as they are. I have paid a hefty sum in the past 6 months repaying previous debts as I have started my path to getting my credit on track. I am not going to let some $29 mystery fee show as being massively delinquent and drag my credit score down. Would the easiest/more likely solution be to more or less pay them off? Pay them/the CA the $29 plus a "bonus" on top to get them to just remove all records of this off my CR? I have read a little a bit about this online, but does this actually work? Or would the most logical thing be requesting a debt validation, then disputing the record with the agencies, etc.? Like I said, the original post I wrote was 3 or 4 times longer than this. Needless to say I am pretty upset with the situation. If you want to read my short novel regarding the situation, let me know and I will send it to you. Any advice anyone may have would be greatly appreciated.

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First, dispute with the CRAs. If the CA validates it with the CRAs, then send a DV to the CA.

Whether or not you decide to pay it, you have a right to know the exact nature of the debt. In response to a DV, all a CA has to provide is the name of the OC and the amount. If you don't feel like a fight, you can offer to pay for a deletion. If they won't delete and don't have any information related to the nature of the debt, then I would put up a fight. Just be sure to dispute with the CRAs first.

Edited by BV80
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I've had in the past even smaller bogus debts. if you want to stand up for principle, be prepared to sue, because if they are unwilling to deal with it, that's the final option you have. If you are willing to sue, then you can make that ultimate threat that might get them to back down.

Note that suing over this is NOT a lawsuit "for $29". It is a lawsuit "for the damages" caused by report a debt you (believe you) do not owe, to have the tradeline removed, and to order then to no longer take any action to collect the account or in any other way treat it as owed.

Be sure you demand that they explain what exactly the $29 debt is for before you send the threat to sue. They may refuse to explain it. If it turns out they did have a valid explanation for it when you do take them to court, you can use that to argue that you do not have to pay their legal costs because they did have the good opportunity to explain it to you directly to avoid wasting the time of the court.

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Thanks for all of the advice. I spoke with the school again today and as expected they didn't know what the outstanding balance was specifically for. Also as expected, they still did not want to do anything about it. I just explained to them that I wasn't going to let this go and was willing to do whatever it took to get it removed. I asked to speak to a supervisor and of course he was "busy". So I asked to guy I was speaking with to relay the message that it is pretty clear that a) they don't have sufficient records to explain this debt B) it doesn't seem they have any document that I signed agreeing to take a loan or debt of any kind from them c) Fighting this battle from my end is not difficult at all, just time consuming and that I would take all the time it took to get it removed d) that if they wanted to drag this out and eventually let this go to court over $29, was there any way that the ruling would go in their favor considering the lack of any meaningful documentation they have?

A short while later I got a call back, and they informed me they would be erasing the balance and removing the account from my credit report! I guess they were just hoping I was not serious and I would just let it go. I am relieved that I didn't have to jump through all of the hoops over something so frivolous.

They said that they had already contacted the company that handles their reporting to the credit agencies, so how long should I expect it to take before I actually see this gone from my credit report. I have never successfully had anything removed before so I don't know what to expect.

This forum and the resources included here have really taught me a lot in just a day on how to handle getting my credit fixed. In retrospect, I didn't even know the basics of how to go about this. Thank you to everyone who replied with advice. It is truly appreciated.

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Thanks for all of the advice. I spoke with the school again today and as expected they didn't know what the outstanding balance was specifically for. Also as expected, they still did not want to do anything about it. I just explained to them that I wasn't going to let this go and was willing to do whatever it took to get it removed. I asked to speak to a supervisor and of course he was "busy". So I asked to guy I was speaking with to relay the message that it is pretty clear that a) they don't have sufficient records to explain this debt B) it doesn't seem they have any document that I signed agreeing to take a loan or debt of any kind from them c) Fighting this battle from my end is not difficult at all, just time consuming and that I would take all the time it took to get it removed d) that if they wanted to drag this out and eventually let this go to court over $29, was there any way that the ruling would go in their favor considering the lack of any meaningful documentation they have?

A short while later I got a call back, and they informed me they would be erasing the balance and removing the account from my credit report! I guess they were just hoping I was not serious and I would just let it go. I am relieved that I didn't have to jump through all of the hoops over something so frivolous.

They said that they had already contacted the company that handles their reporting to the credit agencies, so how long should I expect it to take before I actually see this gone from my credit report. I have never successfully had anything removed before so I don't know what to expect.

This forum and the resources included here have really taught me a lot in just a day on how to handle getting my credit fixed. In retrospect, I didn't even know the basics of how to go about this. Thank you to everyone who replied with advice. It is truly appreciated.

If this ever went to court, you'd request documents in discovery. They would have to provide documentation proving the debt is valid.

First, go ahead and dispute with the CRAs. At that point, the account will be marked as disputed on your CR.

Just because they told you they would have the entry removed from your CR doesn't mean they'll do it. If they validate the debt with the CRAs, I'd call them and request that they send a letter to you stating that they're having the TL removed. Follow up with a letter to them making the same request. I'd give them a couple of months to remove it. If they don't remove it, what takes place after that is up to you.

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If this ever went to court, you'd request documents in discovery. They would have to provide documentation proving the debt is valid.

First, go ahead and dispute with the CRAs. At that point, the account will be marked as disputed on your CR.

Just because they told you they would have the entry removed from your CR doesn't mean they'll do it. If they validate the debt with the CRAs, I'd call them and request that they send a letter to you stating that they're having the TL removed. Follow up with a letter to them making the same request. I'd give them a couple of months to remove it. If they don't remove it, what takes place after that is up to you.

Is there any key terminology I have should use when requesting this in writing? I want to make sure that this is entirely removed from my history, not just showing that that the outstanding balance is 0, but still show a bunch of delinquent payments. I just want to make sure there is no room for different interpretations of what will be done by them.

Sorry, as previously stated I am definitely a newbie to all of this. I have figured out most of the acronyms myself, but was does TL mean? Is there a sticky somewhere with all of the common acronyms?

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