Any luck with credit disputes?

[Pose]

Hope this is the right forum.

I'm starting medical school next term, and I very recently had a big credit issue. I'm now worried I won't be eligible for Grad PLUS loans.

The story is this: I've had a credit card with a major bank since 2008, which is paid with an automatic payment plan from my checking account (same institution). This October, my automatic payment of the credit card was inadvertently canceled by the bank, when my credit card had apparently expired. My card has expired in the past, and this has never been an issue. Anyway, I was never notified the card had expired, nor that my automatic payment plan was canceled, nor that I was past due. I confirmed my address was accurate, and I was still getting checking statements anyhow. I found all this out when I ran a credit check, and saw the delinquent account listed. So I call the bank, and they tell me that it was their mistake, and they'll refund my late fees and send me a new card. Never happens. Instead, they cancel my credit line. I dispute the account closure and delinquency via letter, but was promptly declined. Called the CEO office, and they're doing a new investigation. But what do I do if they also decline my dispute? Try to find an attorney?

As far as I'm concerned, the only thing I did wrong was not monitor that my automatic payment, within the same institution, was still being processed. And I didn't realize my credit card had expired.

Looking for any advice.

Edit: I paid the credit card off, if that matters.

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[The White Coat Investor]

Did someone tell you you won't be eligible for Grad Plus loans?

 

[Pose]

The loan website states that being delinquent on any debt over 90 days is a disqualification.

Really I just want this off of my credit report either way, but the bank doesn't seem very receptive to working with me.

 

[thesauce]

I paid the credit card off, if that matters.

Yes, it does. That was a mistake. Your biggest bargaining chip here was the outstanding debt. The bank doesn't give 2 sh&$s whether you have bad credit - they just want the debt paid. You'd have been far more successful with a bargain: "I'll pay off the debt if you remove this from my credit report." Now you're at their mercy with nothing to offer in trade.

There are many reasons that auto-debit is a bad idea. For one, things like this can happen if you aren't monitoring your accounts closely. Secondary, if someone fraudulently charges on your card, they'll pull all the money out of your account and then it's a real pain getting it back.

Anyway, all you can do it appeal to their good nature. I've heard of people having success sending certified letters to the desk of the VP or other high ranking official. You could also try in-branch with a manager and really play the med school card hoping you get a sympathetic ear.

 

[Stroganoff]

Lot of info in the original post. Brings up lots of questions. I'll try to break it down. I'm gonna ask a lot of annoying, nitpicky questions, so apologies in advance. lulz.

Hope this is the right forum.

SDN Finance/Financial Aid forums are very helpful regarding financing and repaying professional school, but if you want specialized credit-oriented knowledge and advice on 1) building a solid knowledge base, and 2) best successful tactics to clean up credit, I strongly recommend Credit Boards.

I'm starting medical school next term, and I very recently had a big credit issue. I'm now worried I won't be eligible for Grad PLUS loans.

First and most time-saving question that The White Coat Investor already asked: "Did someone tell you you won't be eligible for Grad Plus loans?" If you're still eligible, then a lot of this worrying is moot aside from general credit hx improvement.

The story is this: I've had a credit card with a major bank since 2008, which is paid with an automatic payment plan from my checking account (same institution).

Out of curiosity, which bank? I ask because different banks have reputations as far as how their executive and credit card departments respond to goodwill requests.

This October, my automatic payment of the credit card was inadvertently canceled by the bank, when my credit card had apparently expired. My card has expired in the past, and this has never been an issue.

This is confusing because credit cards normally automatically renew. It's the exception for the trade lines to actually be closed by the issuer. It's also weird to have the issuer close a trade line with an outstanding balance. It's also weird that if this is one late payment (you say October) to also close the account.

Anyway, I was never notified the card had expired,

Can't you look at the physical card and look at the expiration date? This is odd.

nor that my automatic payment plan was canceled,

You don't monitor either/both your credit card account and your checking account using online banking?

nor that I was past due.

Same question. Do you not use online banking? Just 30 seconds to log in every now and then to verify nothing fishy is going on.

I confirmed my address was accurate, and I was still getting checking statements anyhow.

Do you do any e-Statements where you get an e-mail notification when your checking/credit card statement(s) cut each billing or monthly cycle?

I found all this out when I ran a credit check, and saw the delinquent account listed.

Tell me more about this. Who/where did you run a credit check? Was it directly with one or more of the 3 major CRAs (Experian, Equifax, TransUnion)? Or was it a 3rd party website? I ask because there is a HUGE HUGE market in deception going on with other companies wanting to trick people into ordering their credit reports or meaningless (FAKO) credit scores through them rather than straight from the source.

Also, not every trade line reports identically to the 3 CRAs. Some only report to 1 or 2 of them, or they may be handled differently by the CRAs' computer systems.

One more important question: what kind of delinquency did you see, and how many? Just a 30-day late? 30-day + 60-day? 30-day + 60-day + 90-day? Worse?

So I call the bank, and they tell me that it was their mistake, and they'll refund my late fees and send me a new card.

I'm guessing no, but did you happen to get this phone conversation [legally] recorded? There's a general rule of thumb in this game to do like 100% of communication in writing, CMRRR (Certified Mail, Return Receipt Requested) for some correspondence.

Couple things. 1) Any late fee charged by a credit card issuer is between you and them and isn't reported on a credit report. So whether they refunded you or not is not relevant to GradPlus. 2) You said earlier they inadvertently closed the account when the card expired. OK. So did they say they would re-open the account?

Never happens. Instead, they cancel my credit line.

OK, nevermind. So my follow-up question. On all 3 of your credit reports, how exactly is this trade line reporting? Closed by lender? Closed at request of card member? Still open?

I dispute the account closure and delinquency via letter, but was promptly declined.

What kind of language did you use in your letter? Can you copy and paste? Also, was this letter mailed CMRRR?

Called the CEO office, and they're doing a new investigation. But what do I do if they also decline my dispute? Try to find an attorney?

You keep using the phone. Did you [legally] record the phone conversation with the executive office? What did you ask for? What did they tell you?

Re: attorney, the general advice I've read is to get a NACA listed attorney, who is reputable and specializes in consumer and credit law. There's a lot of garbage lawyers out there. (Offense intended, lawyers.)

As far as I'm concerned, the only thing I did wrong was not monitor that my automatic payment, within the same institution, was still being processed. And I didn't realize my credit card had expired.

You probably made a dozen mistakes without realizing it.

Edit: I paid the credit card off, if that matters.

As thesauce already mentioned, it does make a difference as far as how the game is played re: credit repair and bargaining. There's PFD (Pay-For-Delete) where you negotiate, in writing, that if you pay a certain amount (sometimes 100%, sometimes a lower settlement depending on if you're dealing with the OC (Original Creditor) or an outsourced CA (Collection Agency)), that they will delete any negatives from the trade line so it's as if it never happened.

OK, so there's no undoing that. You're at a $0.00 balance (I assume you can prove that the balance is $0.00? Do you have something in writing or the latest statement?)

So the question remains now: Check directly with the 3 CRAs and get an updated credit report from each. You might have to pay $10 or so for a one-time report. Exactly what does the trade line look like? Everything about it: Open/close status. Any comments in the comments field. Any 30-day (or longer) lates and how many. And any other negatives on your credit report.

---------------

I'm not familiar with GradPlus and what their underwriting standards are. Do they check with all 3 CRAs or prefer 1? Do they have a minimum FICO standard? Do they do automatic (computer) underwriting or is there a manual review process by a human being with more discretion? GradPlus for med school is probably where you can find a wealth of answers on SDN. Re: credit repair and a good knowledge base, that's where you go to CreditBoards.

 

[type b pharmD]

Re: grad plus loan eligibility.

As stated on the grad plus website and application instructions, disqualifying credit circumstances are highly limited and very strictly defined. You should be able to verify your eligibility by reading the guide.

Adverse credit, definition of:

Current credit:
--90+ days delinquent on any debt

Past (any of following items within 5 years)
--Default
--Repossession
--Bankruptcy
--Foreclosure
--Tax lien / wage garnishment
--Write off (for any reason) of federal student debt


So OP's current credit is squared away. Question is did the credit card considered "defaulted" officially, historically. If so , they need an endorser / co signer , who must not have "adverse credit".

Grad plus does not really accept appeals from what I can tell. If you were found legally to be in default, then you will need to dispute that vs the bank, and get the results of that action to mail to either Dept of ed or the credit bureaus.

Personally speaking, I would write those letters to the bank customer service people / execs , and make sure to stress how good of a customer you've been and will be as a future high earner, etc.

Hth .

 

[Pose]

Thank you for the replies! As you can tell, keeping up on things isn't a strength of mine.

Out of curiosity, which bank? I ask because different banks have reputations as far as how their executive and credit card departments respond to goodwill requests.

It's Bank of America.

Can't you look at the physical card and look at the expiration date? This is odd.

So the card expired in March...and I never received a new one. I rarely use the card, so the debt was fairly old. I never really noticed it expired. And as you mention, I expected I'd get a new one when this one expired...as I had in the past.

You don't monitor either/both your credit card account and your checking account using online banking?

Not very often. When I do, it's mostly just to check a quick checking balance. I'm so used to the auto payment on the credit card that I almost never check that account. Learned my lesson.

Do you do any e-Statements where you get an e-mail notification when your checking/credit card statement(s) cut each billing or monthly cycle?

I get paper statements to my address for my checking account, but none for the credit account. Unless they're combined. I'll have to look later.

Who/where did you run a credit check? Was it directly with one or more of the 3 major CRAs (Experian, Equifax, TransUnion)? Or was it a 3rd party website?

I ran the credit check through Experian.

One more important question: what kind of delinquency did you see, and how many? Just a 30-day late? 30-day + 60-day? 30-day + 60-day + 90-day? Worse?

One 90+ days. I seriously almost never check the account, and I was never notified that my automatic payment stopped after over five years of working flawlessly. But I see more and more how it's hard to argue my case with them...

I'm guessing no, but did you happen to get this phone conversation [legally] recorded? There's a general rule of thumb in this game to do like 100% of communication in writing, CMRRR (Certified Mail, Return Receipt Requested) for some correspondence.

I didn't get it recorded. And the only letter I sent, which I'll mostly paste below, was sent certified.

2) You said earlier they inadvertently closed the account when the card expired. OK. So did they say they would re-open the account?

When I originally called BoA after seeing the delinquency on my credit report, the customer service rep gave me a "whoops, our bad, we'll restart your automatic payment, refund your late fees, and send you a new card" statement. I felt happy with that. Quite the opposite happened, because after this phone call they closed the account.

On all 3 of your credit reports, how exactly is this trade line reporting? Closed by lender? Closed at request of card member? Still open?

Closed by lender.

What kind of language did you use in your letter? Can you copy and paste? Also, was this letter mailed CMRRR?

Blahblahblah formal opening...

Since 2008, I have had an automatic payment set up for my Bank of America credit line (account number xxxxxxxxxxxxxxxxxx). Every month, $xxx is transferred from my Bank of America checking account (account number xxxxxxxxxxxxxxxxxxx) to my credit account. This October, I had a credit report issued. In this report I discovered that Bank of America had the above mentioned account listed as delinquent. I at once contacted Bank of America via phone, and was told that my automatic payment was accidentally discontinued by Bank of America, that I would be returned all of the late fees, that I would be sent a replacement credit card, and that my account would be returned to 'in good standing'. Since this phone call, I have NOT been refunded my late fees, my credit report still lists the account as delinquent (see attached report), I have been declined a new credit line by Bank of America, and I still have not received a replacement credit card (after THREE requests, to date).

To summarize:

I have had an automatic payment for the account in question since 2008. Bank of America was responsible for this not proceeding this year. I was never notified.

I have never received a notice of past due activity at my current address. I have confirmed the correct address is on file. I also received checking statements at this address from Bank of America.

I have requested a replacement credit card three times, and have not yet received one at my current address.

My FICO score has dropped from xxx to the xxx as a result of Bank of America's accidental cancelation of my automatic payment/transfer to the account in question.

I have not yet been returned associated late fees.

I am requesting that my credit report reflect that my account was never in poor standing.

Please note, the individual I first spoke with on the phone at Bank of America stated that he placed a "note" on my account reminding him to return my late fees, and rectify my automatic payment schedule. To date, neither of these have happened.

Thank you for your consideration.

Blahblahblah formal closing.

You keep using the phone. Did you [legally] record the phone conversation with the executive office? What did you ask for? What did they tell you?

I didn't record it. I honestly never thought that was something they'd agree to. Lesson learned. I requested that they find out when, why, and how my automatic payment was canceled, why my card wasn't auto-renewed, why I never received any correspondence regarding this account/deliquency, and that it be returned to good standing. They apologized profusely, promised a response within seven days. A week later I got a two line letter saying something to the effect of: "It has been determined BoA is not at fault for the closing of the above referenced account. This appeal is hereby considered closed."

Exactly what does the trade line look like? Everything about it: Open/close status. Any comments in the comments field. Any 30-day (or longer) lates and how many. And any other negatives on your credit report.

I'll have to find it when I get home tomorrow, but it says 90+ day late, account closed by lender this October. Aside from that, I have two months of late payments on student loans from around five years ago.

Thanks again for the input.

 

[Pose]

Re: grad plus loan eligibility.
So OP's current credit is squared away. Question is did the credit card considered "defaulted" officially, historically. If so , they need an endorser / co signer , who must not have "adverse credit".

I'm not sure. It doesn't say the word "default" on the credit report. Just delinquent and closed by lender. I wonder if this means the same thing?

 

[type b pharmD]

I'm not sure. It doesn't say the word "default" on the credit report. Just delinquent and closed by lender. I wonder if this means the same thing?

Usually, to be legally and officially in default, I think you would have had to have a court motion filed against you. Many times you would be required to appear in court to either accept or fight a judgment of default. . But it is possible that an automatic finding of default may be issued if you didnt fulfill your credit terms. If the word default isnt stated anywhere on your official materials and you never went to court, you are probably ok for grad plus .. I would call the bank and ask. Casual definitions of default may simply include being delinquent beyond a certain amount of time or violating credit terms in specific ways.

 

[TexasPhysician]

For future reference, states have different laws on recording conversations. Many states including mine only require 1 person in the conversation to agree to the recording. If I get into a tight situation, I would record it without telling the other party as I have no obligation to do so. As part of the conversation, I am the 1 person required to consent, and I consent to my own recording.

I am not a lawyer and this is not legal advise. Please do your own research on this to verify the laws in your state.

 

[Pose]

I have no idea what happened, but today I got a replacement credit card and so I pulled a new credit report. It appears that last week they reopened the account and brought my account up-to-date. The only thing that it says on my credit report is that in October the account was closed by lender, and then in November - present, that I have disputed the adverse account. There is no mention anywhere on my credit report that the account was ever delinquent or past due. Hmmmmmm...

 

[jakeislove]

Pose,

FIA manages BoA credit. If (by some miracle of goodwill, mistake, or luck) the account is showing up as positive..... do yourself a ginormous favor and leave it alone.

FIA is impossible to get goodwill from. I've done tons of searches and haven't found any examples of FIA/BoA granting goodwill requests.

You've won. Don't poke the bear, LOL!

 

[jakeislove]

Forgot to add this to earlier post:

"Closed by lender" isn't a negative statement and doesn't affect credit score.

Disputed accounts aren't factored in scoring models. In the past, credit repair agencies and people abused the dispute process to qualify for mortgages. Most mortgage companies want consumer dispute comments removed from credit reports. Withdrawing disputes requires calling the respective credit bureaus http://dallasloanguy.com/disputes-how-to-remove-disputes-from-your-credit-report/.