Good info Enlightened, good suggestions
If you haven't already, pull a copy of your credit report, and first make sure that there are no errors on it. Then you can get in touch with the credit bureau yourself and if the bill you paid off is still showing as "unpaid", you can file a dispute, and the credit bureau will look into it. (Just a tip: I would file a dispute on any bad stuff that is really old. I did this, not knowing whether I had a valid dispute or not, but I got some old stuff taken off of my credit report, which really boosted my score!) You can get one free report each year from www.annualcreditreport.com
In writing about your dispute the creditor has so many days to dispute your dispute, if they don't respond I "believe" it gets dropped.
However as a realtor, the first things that I would do is what we call in our business, writing "cry baby letters" ask them to remove certain marks against your credit because of reasons, CRY BABY REASONS
Tell them you changed jobs, you were laid off, you got injuired, you were going through bad times, ect...
See if they remove them, if not then go to the dispute with them.
I would send dispute after dispute until the creditor doesn't respond and hopefully it will be removed.
Also ask a mortgage officer to give you suggestions on how to best fix your credit, we deal with this and many times in 6-12 months the person is back with sufficient credit to purchase a home.
abr