Disputed bills can lead to bad credit

Some consumers might be surprised to open up their credit report and find their score about 100 points lower than they thought it was. Unfortunately, this can be the case if someone attempts to dispute a wrongful bill.

According to the Chicago Tribune’s money advice column, one local resident ran into exactly this problem. He took a medical bill that incorrectly charged him for a service he didn’t receive to his attorney general’s office, who promised they would investigate. Although he notified the collection agency about the investigation, the unpaid bill still showed up on his credit report, knocking it off 100 points.

Many credit experts advise consumers to actually pay bills first, even if they plan on disputing it – its easier to get that money back than to repair one’s bad credit after it has been damaged. Under a federal law, a collection agency told by written notice must also hold off reporting to a credit bureau until an investigation is complete – the consumer’s mistake in this case was calling rather than writing. Borrowers can also dispute the notice with the credit bureau, but if the bureau sees that money is still owed because the investigation is not yet closed, they won’t erase the blemish.

Attorney William Shernoff suggested another course of action – a consumer who is billed improperly likely has a case in court, owing to the damaged credit report preventing them from securing things like car loans or mortgages.