Is it worth disputing card opened fraudulently at 17?

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
When I was 17 years old, I lied about my age and acquired a Capital One credit card. All the other information was correct, including my Social Security number. The limit on the card was only $300.

Shortly after getting the card I was laid off, and then I became a single mother. The account went into collections and was considered a charge-off.

However, I paid the card of in full in 2014 after I got a new job. The card was only in collections for a few months before I was able to pay it off. Now it is closed and over with, and I am trying to buy a house at the age of 22.

Can I dispute the account based on the fact that I was a minor at the time it was opened? Or will that open a can of worms for me? I’m trying to fix my credit and I currently have another Capital One card that is in great standing and has been for over a year now, with my correct birthday. What are your thoughts? – Samantha


Dear Samantha,
My first thought is you are really taking charge and turning your life around. A few years ago, you were in debt, out of work, and starting to raise a baby by yourself. At only 22 – an age when many people are far less independent – you have a job and a credit card in good standing, and you’re trying to buy a house. I’m impressed!

I don’t think admitting you committed fraud to challenge the accuracy of the account will help you. A contract is not automatically void because it is with a minor. It’s only voidable, and then only by the minor. In other words, the laws protecting minors would prevent you from being held to a contract. They don’t mean the contract never existed.

In addition, if you opened the card when you were 17, you probably made some or most of the purchases after you turned 18. You may have been 18 by the time the account went into collections. By using and paying on the card when you were no longer a minor, you may have validated the contract, even though the original contract was unenforceable.

Instead of challenging the paid-off account, I recommend you mitigate the negative consequences of it by writing to the credit bureaus. Attach a short statement (100 words or less) to your credit report explaining that you lost your job and faced other difficulties, and point out that the debt is paid in full.

I can see how you would want to have that record of your old card removed from your credit report. It’s not only a remnant of your teen years and the rough times you went through, but it negatively affects your credit score. It may not affect your score as drastically as you think, however. For one thing, you paid off the card in full. That looks far better to potential future creditors than an account still in collections or charged off.

Although the account will stay on your credit history for seven years (five years for New York state residents) from the original delinquency date on the account, it becomes less relevant every month you continue to handle your finances responsibly and keep your new credit account in good standing. Assuming you meet the other qualifications, you should soon be able to buy a house and keep taking steps to reach all your financial goals.  

See related: Paid a charged-off debt, now what?, Minimizing score damage after a charge-off

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Updated: 02-16-2019