Wrinkly Dollar

A Story About Bad Credit

Back in the summer of 2000, I spent about 10 weeks in San Diego. The weather was beautiful every day, the people were friendly, and my weekends were filled with relaxation… except for one. On one Saturday morning that summer, I woke up to a pain in my chest, a broad tightness across the top of my torso. So I did what anyone would do. I freaked out. In the end, after a trip to emergency room, I was fine – it turned out to be a muscle pull in my back. It also turned out that the muscle pull would be the least of my pains from that day.

Back then, I was uneducated in the ways of responsible personal finance and the business of medical insurance. (But who really understands medical insurance in the US?) During my ER visit, I provided my medical insurance details, had my tests done, was cleared, and went home. I thought that was the end of it, and I put the visit behind me.

Fast forward five years to the fall of 2005. The student of personal finance I had become, I decided to check my credit for the first time in my life.

For those that don’t know, there are three major companies that aggregate personal credit information: Experian, Equifax, and TransUnion. Each is required by law to allow you to check your credit once a year. Thus, you can effectively check your credit every 4 months if you use one company each time. For instance, check your credit with Experian every January, Equifax every May, and TransUnion every September. Websites like annualcreditreport.com make it easy to do this from one place.

So, back in 2005, I visited annualcreditreport.com, typed in all my information, and my credit report came up. Let’s see here… two credit card accounts in good standing, great, and… what’s this? Under “Account History”, were two accounts seriously past due under the name CALIFORNIA BUSINESS BU, listing unpaid balances of $176 and $60. California? What did I have to do with the California Business Bureau? I thought of the only time I’d been to the state, back in 2000, but had no idea what the balances could be related to.

I was upset about the $236 in bills I supposedly owed, but I was more upset about what you see below. My “PLUS Score” from Experian, which I interpreted as my FICO score, was much lower than I expected, better than only 31% of Americans. On the only credit-related accounts I held, both of my credit card accounts, I never even kept a running balance. I expected to be among the best US borrowers.

I searched the Internet for any phone number at the California Business Bureau and called it. After working my way through the hornets nest of automated phone prompts and talking to a few people, I found someone who knew about my accounts.

Me: Hi, I was looking at my credit report recently, and it looks like I owe some money to the Business Bureau. Can you tell me if I do? My name is…

Operator: Hold please… Yes, it looks like you have one outstanding balance owed to UCSD ER Physicians and one for UCSD Medical Center.

The hospital! Oh $#!+, I never paid a bill for that visit!

Me: Can I settle those bills right now?

Operator: Yes. How would you like to pay?

I gave my credit card information, was charged for the bills, and put the incident behind me once again. I was still upset. After all, how was I supposed to pay for a service I never received a bill for?! Tons of businesses and government bureaus had my personal information. I was living in New York, where I’ve lived in for most of my life! Surely, the California Business Bureau could have tracked me down and sent me a bill at home.

Fast forward to the spring of 2006. Recalling my plight the previous fall, I decided to check my credit again, in order to verify that I was in good standing.

Two credit card accounts in good standing, good… two previously unpaid accounts from San Diego medical professionals now showing zero balances, great… and… WHAT’S THIS?! One unpaid bill for $90 under the name CALIFORNIA RECOV SYSTEMS for money owed to “UCSD Medical Group”?!? I thought this was taken care of!

I tracked down a phone number online for California Recovery Systems and soon learned that they were a collection agency. Apparently the hospital, having tried unsuccessfully to contact me about my bill, turned over some of my unpaid balances to the collection agency in addition to the CBB.

I called the collection agency and spoke to a decidedly abrupt woman. (Wouldn’t you be if you had to deal with deadbeats all day?) The company’s attitude was apparent – intimidate the delinquent as much as possible to collect as much as possible. I asked the woman what the $90 charge on my credit report was for. She told me it was for my hospital visit, and that it was made up of about $62 originally billed plus $29 in interest accumulated. (Incidentally, this works out to a 6.5% interest rate being charged on my bill from 2000 to 2006. Given the balance was unpaid for years, I would have expected a much higher interest rate charge.)

Admittedly, the company could have charged me anything. After dealing with the unpaid bills for over half a year, I was fed up. I didn’t have the wherewithal to inquire about the detailed origin of the bill or how it came into the recovery agency’s hands. I wanted to put the problem behind me.

I asked the woman to make sure she had no additional unpaid accounts under my name, paid the charges, and hung up. I still have no idea why some of the bills wound up with the California Business Bureau and some with California Recovery Systems.

Fast forward to today. After 3 years of maintaining on-time bill payment, my credit score is back in my comfort range, somewhere just north of 700. But it was clearly hurt by the infamous San Diego Incident, and it’s not where it should be otherwise. Oh well. Lesson learned.

In the end, I took three things away from my experience:

Oh, and don’t get sick.