Question: My husband has a negative listing on his credit report. It is through Chase Bank (credit card) and it is for $2451. We filled out an application for a loan and we were told that we were denied because of this.
He called Chase and they said they have no record of the item and gave him the collection agency that now has his account. He called them and they said they have no record of his account either. Should he dispute it on his credit report? What does he need to do?
Answer: Since Chase referred you to a collection agency, the account is probably a charge-off account and that may be why you were told they had no record. There are several strategies you can attempt:
Dispute with Credit Bureaus. Dispute the negative Chase listing with each credit bureau showing the listing. If Chase Bank has no record of the item then it may be deleted. There are several ways to dispute a charge off, read “How to Dispute a Charge-off” for more information.
Dispute Directly with Chase Bank. Dispute directly with the furnisher of information if, after you disputed with the credit bureaus, the negative listing was verified and remains. In July 2010, under the FACT Act, the furnisher of information (Chase Bank) must respond to credit disputes just like the credit bureaus. Read more about disputing directly with the furnisher of information also known as the 623 Method of Disputes. Once you dispute directly with the furnisher of information they have 30 days to verify the dispute or they must delete the negative listing.
Negotiate with the Creditor. If Chase Bank verifies the negative item as correct you will have to deal with them in order to get the charge-off removed. Talk to Chase because when it comes to charge-offs dealing with a collection agency will not remove the original creditor’s negative listing.
You can try to convince Chase to remove the charge-off from your credit report in exchange for payment. But request to speak with a manager or someone who has the authority to remove the charge-off from your credit reports because speaking with a representative answering the phone will get you nowhere.
You want to negotiate a pay for delete agreement. If the creditor does not agree perhaps you can request a less negative rating such as “account closed”, “account settled” or “paid” instead of the charge-off status. Whatever agreement you are able to negotiate, get everything in writing before you make any payments.
If you are unable to negotiate a better credit rating you may still need to pay the Chase account as it may be a requirement from future lenders. As you experienced, some lenders will not grant you new credit or loans until past due accounts are paid.
Charge-offs can remain on your credit reports 7 years but over time the charge-off will have less negative effect on your credit reports.
The Collection Agency. Because the collection agency stated they had no records, I would leave them alone, especially if they have not listed any negative information regarding Chase on your credit reports. You do not want to awaken a debt collector to start pursuing you.