Most of the time, a creditor will try to collect a debt for a while, but most often they will actually write off the debt and sell it to a third-party collector who then tries to collect. You have the right to request a verification of the debt. The truth is that you never agreed to pay a collector for any debt; your commitment was only to the original creditor.

Check out this free website called Debtorboards.com, where you can get tips from others who have also had problems with debt collectors, about keeping paper trails, recording the harassing phone calls and even success stories about people who have asserted their consumer rights and won.

And read about The Debt Collectors Nightmare, Revenge of the Alleged Deadbeats.

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First, start by getting a copy of your credit report. You can receive one free one each year from the three main credit agencies. Examine your report closely to ensure accuracy. If you do come across a mistake, you can begin taking the necessary steps to rectify it before the damage is too great. This could take some time to rectify, but it is important that you do.

There are companies that will offer to fix these problems for you. But depending on the company, you could pay up to eight hundred dollars per discrepancy. Not only is this expensive, but the companies don’t guarantee that your credit will be fixed. The best solution is to take the time to do it yourself. This legwork will take patience and persistence however, so be prepared. It is not a quick fix.

If you do find a mistake and you need to dispute bad credit against you, you will need proof of your claim. Any documents you have supporting this error should be copied and sent to the creditor. Make sure you obtain the originals however, because once those leave your hands, you never know what may happen to them. You can dispute anything from an incorrect name spelling to a wrong address or wrong amount owed. Also, keep a copy of your dispute letter along with the date sent. This will be important later.

It usually takes thirty days for a dispute to be resolved. If you have not heard from the company within thirty days, contact the credit reporting companies. They will remove your bad credit from the report. You will need documentation however that you did dispute the claim, which is why you kept copy of the original dispute letter. No matter what you are disputing, this is true.

When you have done everything to dispute bad credit marks against you, send for another copy of your credit report. This is to make sure that the offending item has been removed from your credit record. If it remains and you have had contact with the company holding the claim against you, then they did not dissolve the debt. You can file another claim, but it must be for a different reason than the first time. They will not go further unless you have tangible proof that you are correct.

When it is necessary for you to dispute bad credit, your dispute letter should contain an explanation of the problem or error on your report as well as the correct documentation proving your claim. After the problem is cleared up, you should request that a letter be sent to anyone who in the past six months has pulled your credit report for whatever reason. If you find that you are incorrect about the mark on your credit, and you do owe money, contact the creditor. They will usually work with you to get the amount paid off. You may be given payment options or even a reduced amount. They are usually happy to get any money owed to them. Get all agreements in writing.

If you are able to reach an agreement with your creditor, you need to make sure it is reported to the credit agencies. This is so it gets removed from your credit report. You will be able to get your credit back into good standing. After all of this, you need to get yet another copy of your credit report. Make sure that it’s removed. Contact the creditor if you have paid off the debt and it hasn’t been removed from your report. If it hasn’t, you need to pursue the situation further to make certain it gets removed.

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There are some steps that you can take to improve and repair your credit. The first thing that you need to do is to get your free credit report from all of the big three credit bureaus, which are TransUnion, Equifax and Experian. There is distinctly different information contained on each report and you may need to take steps to fix bad information on all three of the reports. None of the bureaus use the same calculations or information so it is possible that one report may be good and the other two bad or some variation of that.

Any creditor may use just one report or any combination of all three so it is important to make sure that all of the reports are as clean as possible. There may be some information that you cannot change so the best thing to do with that is leave it alone but make sure that you dispute the things that you may be able to change and concentrate on those.

Any inaccurate or erroneous information on your report should be deleted. If it is not your information or it is invalid for any reason you need to dispute it as soon as possible. The bureaus will have 30 to 45 days from the date of dispute to prove that the information is correct. If they cannot prove the validity of it they must delete it from your account.

You can also contact the original creditor and see if they will remove the information. If they say they will just make sure that you follow up because it is not a priority for them and it could easily be overlooked. It is your responsibility to make sure that they follow through.

It can be a tedious and slow process to repair your credit. It may take more time than you realize to get the results you want but once the process is completed you can relax more in your financial life.

As you work towards repairing your past credit it is crucial that you maintain and make sure that you do not get any more bad credit. You must live within your means and avoid using your credit cards or loans. It is also imperative that you make all of your payments on time, every time.

You will also need to pay down your debts as much as you can. A huge deciding factor in credit scores is the actual debt to available credit ratio. Do not borrow more than 15 to 35% or the money you have available for credit to ensure the highest possible credit scores.

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There are credit repair programs that allow the debtor to work out a solution with their creditors by making arrangements to pay off their existing debt by lowering the balance due, lowering the interest rate or even eliminating interest payments. An effective program will always include some education about spending and credit responsibilities.

Most programs will start out by compiling a list of debts that the person owes and the current monthly payments required. When the amount of debt is accounted for the next step is to contact all of the creditors.

A representative from the program will work with the creditors to make arrangements that allow the debtor the opportunity to pay off their debt quicker and at a lower monthly payment. Once they have contacted all of the creditors oftentimes they can lower the monthly payments by a considerable amount sometimes even as much as fifty percent.

Another advantage to using a credit repair program besides the facts that the monthly payments can be substantially reduced and the total debt paid off sooner is that all of the debts can be consolidated into the program. The debtor can make one monthly payment to the program and they in turn will pay all of the creditors. The representatives from the program will deal with all of the creditors.

Also if there is any inaccurate information showing on the debtors credit report the program can help them to dispute the information and get it removed from the report. Since making disputes can be a confusing process this is a great benefit for using a credit repair program.

You can find credit repair programs that are both for profit and not for profit. There are programs available that can help anyone and while a credit repair program can assist an individual with the credit repair process probably the most beneficial part of a program is the education that helps the debtor learn how to maintain good credit and use it responsibly.

When you can improve and repair your credit your financial life becomes much easier. There are many good credit repair programs out that that can help you to do it quickly and efficiently.

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But think about this……

If you owed Sam money and someone named George tried to collect the money, would you just automatically give George the money or would you make sure that he was authorized by Sam to collect? Would you make sure that you actually owed the money?

Exactly. You need to do the same thing with a collection agency. You never entered into any type of agreement with the collection agency. You only had an agreement with the original creditor.

And that is the purpose of debt validation. Make the collection company prove that you owe the debt and that they have the right to try to collect it. Here is a sample debt collection letter. 724Credit also has other credit repair letters here.

Your Name
Your Address
Your Phone #

Collector’s Name
Collector’s Address

Date

Dear Collection Manager,

Re: Account Number__________
This is to inform you that I’ve recently pulled my credit report and noticed that there’s a collection from your agency on my credit report. I have never been notified of this collection. However, this letter does not imply that I refuse to pay this debt. Rather, I would like to dispute your claim.

As per the FDCPA, I have the right to request a validation of this debt. I request you to prove that I am indeed the party who is by contract obligated to pay off this debt.
I hope you are aware of the fact that reporting any invalidated information to major credit bureaus may constitute defamation of character, as negative listing on credit report does not allow me to enjoy the benefits of good credit. In addition, you must also be aware that until you validate this debt, you can neither continue collection activities nor report this information on my credit report. I’m sure your legal staff will agree that non-compliance with this request is likely to put your company in serious legal trouble with the Federal Trade Commission (FTC) and other state/federal agencies.

Please attach copies of the following documents:

1. Agreement with your client that authorizes you to collect on this alleged debt.
2. Agreement that bears signature of the alleged debtor wherein he promises to pay the creditor.
3. Complete payment history on this account so as to prove that the debt amount you wish to collect is correct.

Thank You,
Your Signature
Your Name

For more sample letters for your credit repair arsenal see the other credit repair letters here at 724credit.

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See the sample debt validation letter at 724credit.

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The FCRA gave you the right to dispute the errors on your account.  After receiving the dispute the credit bureaus and lenders have a certain amount of time to verify the validity of the information or it must be removed from your account.  Credit repair can be accomplished on your own or you can engage the services of a professional credit repair company. 

Be aware however, that the Federal Trade Commission states clearly on their website that “No one can legally remove accurate and timely information from a credit report.  The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete”.

This statement seems to be very clear and explicit and that is one reason why the critics of credit repair will try to dissuade you from any attempts to repair your credit by telling you that trying to repair your credit is futile.  The fact of the matter is that you can make a significant difference in your credit score and on your report when you repair your credit.  

Even thought the FTC statement seems quite straightforward, there is quite a bit of ambiguity in the quote when it comes to real credit reports and real situations.  Up to 75% of all credit reports are deemed to contain mistakes.  Since this is the case, credit repair companies actually offer a valuable service.  Of course, you can do it yourself and you may want to consider that but it does take time and energy and if you already have a busy life you may not want to tackle a major project like that on your own.

Since “accurate and timely” information should not be removed from a credit report, what are the criteria to define “accurate and timely”?  Many times miscommunications or mistakes happen between consumers and lenders and something that may be considered “accurate” may not be that at all.

Many credit reports have issues that are completely inaccurate.  Listings that belong to someone else, duplicate entries, listings that have been on your report for longer than 7 years, and anything that is the result of identity theft need to be removed from your account.  These issues frequently show up on credit reports.

As a consumer you also have the right to dispute any item that you think is misleading, ambiguous, unverifiable, biased or questionable.  Occasionally there may even be issues that the lender feels are accurate but you were never able to defend yourself with your side of the story.  One reason why it is so crucial that a consumer can dispute negative listings is because of the fact that there are always two sides to a story.  You can dispute anything showing on your report that is inaccurate, untimely, misleading, incomplete, ambiguous or questionable either on your own or by employing a professional credit repair service.

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Most people who know about credit and credit practices and repair are familiar with this law.  However, there are two additional laws that affect you as a consumer and can be beneficial to you for credit repair and it is wise to learn about these laws also.

While the FCRA or the Fair Credit Reporting Act is the foundation which makes all credit repair possible, the FCBA or the Fair Credit Billing Act and the FDCPA or the Fair Debt Collection Practices Act are also critical to a solid credit repair plan.

The FCBA or the Fair Credit Billing Act requires creditors to bill completely and correctly.  It prohibits charges that have the wrong date or wrong amount, unauthorized charges, charges for goods or services that you did not accept or were not delivered as agreed upon.  It prohibits a company from failing to post payments or other credit and failing to send billing notices to your current address, provided that any changes of address were received by them 20 days prior to the billing cycle.  This law also allows a consumer to request written proof of purchase or requests for clarification. 

The Fair Debt Collections Practices Act was enacted to protect ordinary consumers from unreasonable and unfair collection agency tactics.  Many collection agencies engaged in despicable practices in the past in order to collect a debt.

The FDCPA specifies reasonable collection practices.  For example, a collection agency cannot contact any third party who does not owe the debt.  They cannot issue false threats of reporting it on your credit or referring your account to an attorney in order to intimidate you to pay.  They are only allowed to call within reasonable hours, which are typically between 8:00 am and 9:00 pm unless they have your specific permission to call at another times.  They are not allowed to call you at inconvenient or unusual times or places if you let them know what is unacceptable.

This law, the FDCPA is very extensive and it has a long list of restrictions and acceptable behavior for collection agencies.  Just be aware that you must specifically and just to be safe, you should probably do it in writing tell them when and where it is unacceptable for them to call you.  If you have any questions about the law you can do an Internet search and read it in its entirety.

These three laws are critical to you as a credit consumer.  You can use any of them as a beneficial measure when you need to complete credit repair so it is wise to be aware of them and know where to find further information if necessary.

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What you need to do now is provide a written request and always make sure that you keep a copy and mail it via certified mail return receipt requested after you do this the collection agency must stop all collection activity until they have supplied the appropriate validation.

Sometimes but not always a collection agency might stop all collection activities and give the account back to the original creditor for collection rather than provide validation.

Remember that a collection agency is not required by law to supply the validation, nonetheless, they must supply it if they are going to continue to try to collect the debt. Also remember that you have the right to dispute the debt directly with the original creditor.

If you have demanded validation from a creditor who has already listed a negative on your credit report, they are required to note that the account is “disputed by consumer”. They cannot make a new listing or change or verify a current listing until they have provided you with the validation that you requested.

The 3 steps on how to seek validation of debt and deal with debt collectors.

1. Request a validation of debt – Send a request letter to the collection agency asking them to validate your debt. Just check out a sample debt validation letter so that you’ll know how to format the letter. The letter should be sent via certified mail with a return receipt request.

2. If the Collection Agency Doesn’t Validate Debt – If the collection agency doesn’t send you a satisfactory proof, then you need to send them the three documents below:

A. A copy of your validation letter
B. Copy of the return receipt
C. A statement that the collection agency has violated the FDCPA

As per FDCPA, if the collection agency doesn’t validate your debt, then they can no longer collect the payments and they shouldn’t contact you anymore.

3. Remove collection listing – Under the FCRA, collection agencies should not report a negative entry if they don’t validate your debt. You need to send a letter asking them to remove the collection listing.

You should also inform them that if they don’t remove the collection, you might sue them on account of violation of the FDCPA. Wait 15-20 days for a reply from the debt collectors. They’ll either remove the negative listing or else they won’t respond at all.

I hope these steps have helped you. Good luck on pursuing the best credit you can have!

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