Recently, I had to deal with a derogatory item appearing on my credit report that was reported in error.
Besides being frustrating to deal with it can be time-consuming but necessary in order to preserve your credit rating.
A credit rating is usually best represented by a three-digit credit score ranging from a low in the 400s to about 820 or 850 depending on the credit bureau. This score has become all the more important as more lenders, credit card companies, retailers and banks rely upon them when granting credit.
But oftentimes the data file from which the credit score is derived contains inaccurate or outdated information. And it is up to a consumer to make sure that such inaccurate or old data references are corrected or removed.
All too often, creditors and collection agencies make mistakes in their reporting. So it is important to fight to protect your credit history and score.
- Know your legal rights under the Fair Debt Collection Practices Act
- Write a letter demanding verification of the debt: A consumer does not have to prove that the debt is his. The burden of proof is on the creditor and collection agency. Send a certified letter (return receipt requested) to the creditor and agency demanding proof of the debt. While they are verifying they cannot pursue further collection action – including any harassing phone calls. Debt validation is discussed in Section 809 of the Fair Debt Collection Practices Act.
Here’s a sample letter that I have used:
DEMAND TO VALIDATE
“Per the Fair Debt Collection Practices Act, I am requesting written validation of this alleged debt, which includes:
– a copy of the original signed contract with my signature
– validation of the original “Date of Delinquency” for this alleged debt
– validation of the “Date of Last Activity” for this alleged debt
Per the Fair Debt Collection Practices Act, the burden to validate the debt falls on the debt collector. It is not my responsibility to validate this alleged debt for you.
Either validate this alleged debt or remove it from my credit files and stop attempting to contact me.
If this notation is not removed, I will have no choice but to take legal action per my rights under the Fair Debt Collection Practices Act.
Receipt of this letter is being officially time-stamped by the USPS. Refusal to validate will be officially documented.”
For Complaints You Consider to be Malicious, Frivolous and a Possible Scam
“I also have filed complaints with the Attorney General of your state because of this harassing activity and will take further actions if this frivolous and erroneous notation is not removed from my credit file.”
Also consider contacting the licensing authority for collection agencies in the state where you reside. And don’t forget to check out the complaint procedure at the Federal Trade Commission website.
Using A Professional Credit Repair Service
Too often this debt validation and dispute process can be frustratingly time-consuming. Sure you can do it yourself. You can do almost anything yourself (like changing your car’s oil) but not everybody does which is why there are plenty of other service business out there in the world to help you fix your car, mow your lawn, deliver your baby or do your food shopping. It’s a matter of how much is your time worth. Ask yourself if you really have the time, energy or know-how. This is where specialists who deal in handling the process can come in and play a valuable role.
A reputable firm will follow the requirements of the Credit Repair Organizations Act which dictates the rights consumers have when dealing with credit repair organizations. They will provide you with a written agreement detailing their services and not do any services until you have completed a three-day cooling off period to change your mind. Most firms will work on a “pay-for-performance” arrangement meaning you only pay for the accounts successfully deleted.
Just avoid the firms that promise the moon. No agency can get rid of references to legitimate liens, bankruptcies or judgments. (Sure, they can help get rid of outdated references that still appear after the statutory time limit – for example bankruptcies may remain on for up to 10 years). No agency can create a new identity for you. No legitimate agency can charge you money for credit repair services before completing the promised services (note: legitimate companies may charge for other non-credit repair services per the agreement such as consumer education or other counseling).
You can find more information at the Federal Trade Commission website.
For help with credit repair you may want to check out this firm: Valley Credit Repair and Credit Coaching.