Karen,
Obviously, you should have disputed it differently. You shouldn't have told them to update it, you should have told them to remove it. Always request exactly what you want.
By asking them to update it as paid, you pretty much verified that it was yours. If you would have asked them to remove it, they would see that it was paid and probably just remove it since there is no logical reason to keep it on.
You can try again, but it won't be as easy. Just keep sending them and NCO letters asking them to remove it.
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