If a person fails to pay on a mortgage or a credit card, it is easy to imagine how that could hurt the person's credit score. However, something as innocuous as renting videos at Hollywood Video or Movie Gallery has come back to haunt the credit reports of many Americans. Both companies filed for bankruptcy last year. Their outstanding late fees were turned over to National Credit Solutions, a business based in Oklahoma City.

Without sending any notices of a balance due, National Credit Solutions placed collection notices in about 500,000 Americans' credit files. Many of the people could owe money to Hollywood Video or Movie Gallery, but National Credit Solutions' actions have troubled many attorneys general across the country because of the lack of notice and the fact that NCS was attempting to charge an exorbitant $75 collection fee.

People affected by NCS are seeing their credit scores take a significant hit, with some borrowers having their credit limits drastically reduced. One Seattle schoolteacher had the limit on his Discover Card reduced from $8,700 to $600 because of an NCS collection notice over $166 in overdue video late fees. He called NCS to dispute the late fees that he could not recall incurring. A telephone representative offered to remove the negative information from his report if he paid. He paid and the negative information was removed the next day.

But not only did he pay, he and others like him, many who have refused to pay money they do not believe they owe, have complained to state attorneys general across the country. NCS is now facing a lawsuit filed by the state of Montana. Additionally, the Better Business Bureau has revoked National Credit Solutions' accreditation for "engaging in activities reflecting poorly on the BBB or its members."

Unfortunately, credit scores can often be influenced by unscrupulous creditors. If you have questions about your credit score or credit repair, an experienced credit repair attorney can help.

Source: MSNBC, "Video late fee? Forget about that mortgage," Herb Weisbaum, 2/3/2011