One of my kids was renting a dorm while in college two years ago. Upon moving out, there was an extra charge of $150 for something or other. Because mail was sent to the old address, she did not know about it. Lo and hold a year later I get a letter saying this amount was sent to a collection agency. I call them up and explain the situation. They said "Are you willing to pay the fee so we can close this account?" I said Sure but there wont be any reporting of this, right? "Oh no, we do not report for such a small amount." Today we tried refinancing our house so the bank ran a credit report. The guy calls me back and says "What's going on with this collection you had?" Uhhh, what? "The credit bureaus have taken 58 points off your FICO score because of it" WHAAAAT? He told me that this seriously affects the refi rate and that, over time, this could result in more than $10,000 of missed savings on a better interest rate we could have gotten. All of that for something I had nothing to do with... apart from being listed as the guarantor on the student apartment lease. UNREAL !
Needless to say, I called the collection agency which, conveniently enough, is closed because of east coast time. But, from what I hear it could take from 30 to 90 days for any resolution to filter down to the credit bureaus. Who knows where the rates will be at that point... Infuriating to say the least.
Moral of the story... be sure to follow up on everything that has your name on it, even simply as a guarantor for your kid's dorm room!
Needless to say, I called the collection agency which, conveniently enough, is closed because of east coast time. But, from what I hear it could take from 30 to 90 days for any resolution to filter down to the credit bureaus. Who knows where the rates will be at that point... Infuriating to say the least.
Moral of the story... be sure to follow up on everything that has your name on it, even simply as a guarantor for your kid's dorm room!