Get a credit report from all three of the credit bureaus, they are free if you havent gotten one in last year from AnnualCreditReport.com (make sure it is THIS site, others will charge you). Once youve gotten the reports, find out the collection agency, make a deal, make a payoff. Unfortunately you may be stuck with it for 7 years after it has been closed, but you can write a letter to each company to attach to this account explaining the situation.

Also, make sure your credit reports are accurate, that everything is up to date. Fix those things that are 7 years plus, etc.

This will begin to get your score back up. Also get a lawyer and get your phone $$ back…

How old is the phone bill?

If it’s more than 6 years, it’s going to be erased soon from the credit report.

And I don’t think your bank will refuse a mortgage for this situation - if it’s the only bad item in the credit report.