Installment Agreement Paid and Still Sent to Collections By Utility Company

I moved to NC from NYC and had to close my account with my gas company, National Grid/Keyspan. Since I'd been on Balanced Billing to help manage my payments monthly (which I also paid as agreed each month) I was immediately set up with an agreement to pay the remaining balance of $571. I made a downpayment and an agreement was drafted that I would pay $100 a month for 5 months until the account's balance was $0.

Upon checking my recent credit report, I noticed that the account was listed as a Collections account. However, I have been paying every month as agreed. After calling the utility company, they explained that regardless of whether the consumers pay the balance or not, as soon as an account is closed it automatically goes to collections. They claim that as soon as I make the last payment, the balance will be shown as satisfied and, though it won't be deleted from my report, will turn into a "positive" item on my report and will no longer be listed as negative. Doesn't really make sense to me, though.

Is this item negatively affecting my credit score? Is there any use in even shelling out the rest of the $200 that I owe at this point if it's going to be listed as negative (paid in full) anyway? I've always paid everything on time and this is the only item listed as "potentially negative" on my report. I really feel as if it's not fair for me to be punished for paying an agreement they set up for me each month on time (as I couldn't pay all of that at one time, obviously) only for them to immediately report me as if I never paid anything as soon as I was forced to close my account. I feel cheated and mislead into paying.

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Dec 23, 2011
Installment Agreement Paid and Still Sent to Collections By Utility Company
by: Debtcollectionanswers

When you made the arrangements to pay your remaining balance, did the agreement indicate that your account would be reported as being in collections? If not, then I feel that the utility was misleading. However, at this point, you risk creating more problems for yourself and probably doing more damage to your credit score if you do not pay what you owe according to the terms of the agreement.

And yes, the fact that the account is in collections will damage your score somewhat. However, if it is the only negative information you have in your credit record, then the damage should not be significant. Further, once you pay the balance in full and the account is listed as paid in full, that information should help your score as well.

Aside from paying the balance in full rather than in installments, what you did was best for your credit history. The reason is that if you did not pay the debt at all, you run the risk of being sued for the money and having a court judgment on your credit history. That would be very damaging to your credit score, Further, the utility would be entitled to take action to collect on the judgment, by garnishing your wages, seizing money in your bank account, putting a lien on an asset you may own, and so on. So, while having the collection account in your credit history is not a good thing, it is better than having your history show that there is a court judgment against you.


Mar 04, 2015
Same issue
by: Burned as well

I moved and requested them to get it out of my name they said they would. Well they never did and charged me for 2 more months in which I was not living there. They refunded those charges and said they would send the final bill. It took about another month to get that final bill and before I even got the bill they put it on my credit. I promptly paid the bill once I got it and still the account remained on my credit they never even updated to paid. I called them and said hey whats going on and they replied there was nothing they can do and to dispute with the Credit Bureau so I did and it was deleted. well almost 4 months later it reappeared on my credit and the bureau said that is what they were reporting (national Grid) So I called them and they said that the account was paid and to dispute I told them I did and that they said they were reporting it again and as unpaid they told me to redispute it and that it would remain on my account. This is obviously not legal as they are reporting false information to the bureaus and here we are almost at 30 days and still no change. Is this even legal? They are reporting as a factoring account as if they extended me credit which they did not and refuse to update it to a paid 0 balance.

Reply from DebtCollectionAnswers.com

If your credit report shows false information, you have disputed it, and it continues to appear there, you have one of two choices. One is to file a complaint with the Consumer Financial Protection Bureau. The other is to talk with a consumer protection attorney familiar with credit reporting laws. You may have a case for credit damage. (In addition the fact that this was disputed, removed and then reappeared is a problem. You're supposed to get written notice before that happens.) We would suggest you at least talk with an attorney to find out whether it's worth pursing, and if not, go to the CFPB. If you need help finding an attorney in your area, use the search function on the website of the National Association of Consumer Advocates.

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