I have student loan debts that have gone to collection and I have been paying them in full and on time for the last nine months. However, I checked my credit report and my scores have not improved and the company has been posting every month that I have not been paying them... defamed character? Inaccurate credit reporting? So, I had this brilliant idea to put the words "PRINCIPLE" on my September payment, the check has yet to be cashed it has been a month and a half! I sent my October payment out without that word on there and I expect that one to be cashed business as usual. I don't think that the September payment was lost in the mail because they would have been calling me for the payment and they haven't--I believe that the collection company doesn't want to cash the September "Principle" payment because they can't use any of it to pay for their fees it would have to go only to the balance. Is this legal? The collection company has a bad reputation nationwide for being shady and I wouldn't put it past them. P.S. I live in the U.S.

Yes they can refuse to pay it if you write "principle" on it... you DO owe interest as well as fees and that is a big part of the loan. A bigger part now that you defaulted on your original obligation.

If its in Collection... they have a legal right to collect their fees IN ADDITION to the actual loan and accrued interest... you lost the ability to dictate much of anything when you defaulted on the original loan. And yes they can collect their fees first.

And yes.. they CAN make it worse... they can file for a writ of Garnishment and take it DIRECTLY from your wages and bank accounts. Asuming you lost the case in court before it went to setlement. If they didn't they can still do just that.

Now if you can prove they actually have been paid.. present proof they have been accepted and cashed ( if you have been playing the "Principle" game its your fault if they were not cashed not theirs) and present it to the credit agencies.. (innacuracies happen all the time).. just because you mailed something doesn't mean it was a valid payment. Being "Cute" will only cause you further problems. These people deal with people who can't or won't pay their obligations every day... they have seen and heard it all.

If you had paid or deffered the loan before... you wouldn't be dealing with the collection agency now.

My intent was not to be "cute" it was to get them to report to the 3 credit bureaus that I have been making payments. I have been making payments on time and as agreed for the last 10 months and they have yet to disclose that to the bureaus. Why?

You can contest those reports that are inaccurate directly to the credit agencies. Present proof the individual reports were inacurate and in fact paid. If you can prove they are inacurate they WILL correct it. Remermber there are THREE different ones you may have to report to.

This is one of those things best done yourself.