Can my credit rating be tarnished by one incident?

[oceania]

I'm being charged a $100 cancellation fee from Good Life because I cancelled early. I think that in itself is ridiculous that I have to pay not to use their services but at any rate I cancelled because of the horrible service and experience and as a matter of principle I do not want to pay these vultures.

I've never ever been in debt and I have a perfect credit score (always pay my bills on time and in full). If GL sends this to the collection agency, how will it affect my credit rating even though my record previously is clean? Except for getting a mortgage, I don't plan to ever take out a loan (my motto is if I don't have the money to pay for it, I'm not buying it).

How long will they harass me for payment? What is the worst that can happen? Just wondering if it's worth the trouble or should I just forget my principles and pay the $100.

[Jucius Maximus]

If you have something in collections then it will be a major blow to your credit rating. If you owe the money then pay it. It's not like it's a $19,000 credit card bill or something. It's just 100 bux. Pay it now and save the hassle.

(What you should have done as a matter of principle is read the contract before you signed!)

[spf1971]

What principles? The principles where you sign a contract, cancel early and refuse to pay your cancellation penalty? Those principles?

[cgtlky]

How long will they harass me for payment? What is the worst that can happen? Just wondering if it's worth the trouble or should I just forget my principles and pay the $100.


Not sure what province you lived, assuming Ontario, they will have 2 years to harassed you. Worse thing is credit history is damaged. Eat your principles just pay $100.

[oceania]

(What you should have done as a matter of principle is read the contract before you signed!)

What principles? The principles where you sign a contract, cancel early and refuse to pay your cancellation penalty? Those principles?

Why should anyone in their right mind continue to for pay bad service/experience? When most sign a contract or agree to pay for something, they generally expect something of value/positive in return. It's not like I used their gym and refuse to pay for it.

They must have a lot of people cancelling to adopt such a ridiculous policy.

[YYC27]

They must have a lot of people cancelling to adopt such a ridiculous policy.

You haven't looked at a lot of contracts, have you? When you signed, you agreed to a set term. If you want out of that early, you have to compensate them for the lost revenue. This is a very standard thing.

[oceania]

You haven't looked at a lot of contracts, have you? When you signed, you agreed to a set term. If you want out of that early, you have to compensate them for the lost revenue. This is a very standard thing.

No I haven't looked/signed many contracts. The YMCA and bunch of other gyms that I looked into don't have that stipulation. It still doesn't make sense to me because if I never joined in the first place they wouldn't receive that revenue so how is that $100 going to compensate them for lost revenue?

Honestly, when I joined I had no intentions of cancelling but you do don't know what it's like until you actually start using it regularly and after 2 months I started hating it so much that I dreaded going.

I guess it's my mistake so I have to pay for it (even though I still don't think it's right).

[nuberific]

Just chalk it up as life experience and pay it. You'll be just a bit wiser the next time around.

It's not worth the hit to your credit.

[randomdef]

I learned (no thanks to this forum) that it won't make a lick of difference in the long run. Credit cards will still give you credit, LOC will still happen and you can buy cars until you are out of gas money. I applied for a mortgage and told them to overlook it or I will go elsewhere, guess what? every single bank overlooked it because the rest of my credit was flawless.

not everyone here has the best advice, and I'm not saying I do either, but that has been my experince.

[oceania]

I learned (no thanks to this forum) that it won't make a lick of difference in the long run. Credit cards will still give you credit, LOC will still happen and you can buy cars until you are out of gas money. I applied for a mortgage and told them to overlook it or I will go elsewhere, guess what? every single bank overlooked it because the rest of my credit was flawless.

not everyone here has the best advice, and I'm not saying I do either, but that has been my experince.

This is exactly what I would have thought! Thanks for sharing.

[urban1]

A collection agent will buy your debt for $5 dollars and then start calling you. At that point $100 will seem like a small price to pay to make the harrassment stop./

I'm being charged a $100 cancellation fee from Good Life because I cancelled early. I think that in itself is ridiculous that I have to pay not to use their services but at any rate I cancelled because of the horrible service and experience and as a matter of principle I do not want to pay these vultures.

I've never ever been in debt and I have a perfect credit score (always pay my bills on time and in full). If GL sends this to the collection agency, how will it affect my credit rating even though my record previously is clean? Except for getting a mortgage, I don't plan to ever take out a loan (my motto is if I don't have the money to pay for it, I'm not buying it).

How long will they harass me for payment? What is the worst that can happen? Just wondering if it's worth the trouble or should I just forget my principles and pay the $100.

[slavka012]

Just chalk it up as life experience and pay it. You'll be just a bit wiser the next time around.

It's not worth the hit to your credit.
I disagree. A lousy 100$ claim from a lousy company will do NOTHING to your credit rating if you have a dozen of other good accounts. And that is IF they send it to collection. Big IF there too.

PS. Stop worrying about the credit rating so much.

[slavka012]

A collection agent will buy your debt for $5 dollars and then start calling you. At that point $100 will seem like a small price to pay to make the harrassment stop./
That is an outright ********.

I've dealt with collection agency on several occasions and I researched the subject carefully. BY LAW they are REQUIRED to stop contacting you at your first request to do so. So I faxed them a polite request to never contact me again and they were gone from my life.

Seriously, stop fueling myths, write only what you *know*

[Salinger]

That is an outright ********.

I've dealt with collection agency on several occasions and I researched the subject carefully. BY LAW they are REQUIRED to stop contacting you at your first request to do so. So I faxed them a polite request to never contact me again and they were gone from my life.

Seriously, stop fueling myths, write only what you *know*

I think what you're leaving out here is, that BY LAW the request must be made by registered letter and it must dispute that you owe the debt and tell them to take you to court if they wish to pursue the matter. Of course, even this doesn't preclude them from placing the collection on your credit bureau.

If it was as easy as just telling them not to contact you, no one need ever pay a debt. Just wait for it to go to collections and then tell them to get lost.

[slavka012]

I think what you're leaving out here is, that BY LAW the request must be made by registered letter and it must dispute that you owe the debt and tell them to take you to court if they wish to pursue the matter. Of course, even this doesn't preclude them from placing the collection on your credit bureau.

If it was as easy as just telling them not to contact you, no one need ever pay a debt. Just wait for it to go to collections and then tell them to get lost.

No that's not true either. Fax is enough or even on the phone. If you read my post, you'll see that I did that personally on more than one occasion.

If it was as easy as just telling them not to contact you, no one need ever pay a debt. Just wait for it to go to collections and then tell them to get lost.

There is debt and there is bogus debt. It is easy, if the debt is bogus. If not, court of justice is the proper venue for the claimant to go to. Collection agency exist for entirely different reasons, and so does credit bureau.

I can issue an invoice for $100 to you for services never provided and send it to collection agency. By your logic you would immediately pay it cause it is so much pain.

[YYC27]

You can ask that the agency only contact you by mail. You can't ask them not to contact you at all unless you send them a registered letter saying you dispute the amount owed, and suggest they take the matter up in court.

[YYZFA]

I have absolutely no experience with collections agencies and my story is purely anecdotal, but I have no reason to disbelieve it, because I trust the friend who told it to me.

My friend used to work in the billing department of a fitness centre. According to the terms and conditions of membership, you had sign up for an annual contract and you had to cancel your membership a certain number of weeks before the anniversary of you signing up, or else it would automatically get renewed for another year long contract (monthly billing on the client's credit card).

Anyway, people would forget this stipulation of the agreement, and try and cancel their membership midway through their contracts. After they were told that this can't be done, as it would be breach of contract, many people became frustrated and cancelled their credit cards. Their accounts would go into default. Whether these clients were ever contacted by any collection agency or not, I do not know, but they usually claimed that they were not. My friend would receive calls from these former clients several years later because they were freaking out that they couldn't get a loan or a mortgage because of this defaulting gym membership. Their credit was ruined.

Maybe this isn't the same as the OP's dilemma, but I think he is in breach of the contract he signed, so shouldn't he just pay it out of principle, regardless of whether it will affect his credit or not?

[Salinger]

No that's not true either. Fax is enough or even on the phone. If you read my post, you'll see that I did that personally on more than one occasion.

I did read your post. In it, you said you researched and stated that what you were saying was correct according to the law. It was not.

Here's the Government of Ontario's website dealing with collection agencies.

http://www.gov.on.ca/mgs/en/ConsProt/STEL02_045978.html

It categorically states the notice to cease must be given via registered mail. The fact that you've had several debts sent to collection and were able to do it otherwise may be your experience, but it is not the law as you stated.

There is debt and there is bogus debt. It is easy, if the debt is bogus. If not, court of justice is the proper venue for the claimant to go to. Collection agency exist for entirely different reasons, and so does credit bureau.

I can issue an invoice for $100 to you for services never provided and send it to collection agency. By your logic you would immediately pay it cause it is so much pain.

No, don't put words in my mouth. You could issue a bogus invoice for $100 and send it to collections. I would refuse to pay, and the collection agency could put a collection notice on my credit bureau. I would dispute the notice with the credit bureau, and they would give you 30 days to show definitive proof I legitimately incurred the debt. You wouldn't be able to, the collection notice would be removed.

Despite the debt being in no way legitimate, as I said before, that doesn't preclude a collection agency from messing up your credit bureau. The difference between that and a legitimate collection notice is, you can have it removed. But you still have to make the effort.

In the OP's case, if it was placed on his credit bureau, it would stay there as the company could provide a copy of the contract he entered into agreeing to the said charge with his signature.