If you’re wondering why debt validation is such an effective way to fix your credit report then this article is for you. In short, the reason so many people turn to debt validation as a solution to credit problems is because it’s possible that, in many cases, collection agencies are simply not allowed to collect from you.

And if you’re willing to do a little homework, you might find that cleaning up your credit report isn’t going to be quite as difficult as you thought. Remember, though, that there’s a difference between disputing debt with the credit bureaus and validating debts with collection agencies.

So when you find collections on your credit report, consider the following the questions:
  • Do you actually owe the debt in question?
  • Is there a valid contract to prove it?
  • Is the amount you owe accurate?
  • Is the collection agency legitimately collecting for the original creditor?
If you have any suspicions that the credit bureaus are reporting inaccurate information, you have the right to make a dispute on the matter. This is the first recommended action to take if you’re planning on repairing your credit.

Collection agencies are governed by the Fair Debt Collection Practices Act (FDCPA). Under the FDCPA, you have the right to validate debts. This means that they must provide legal evidence of the debt as well as proof that they are responsible for collecting it.

"FDCPA Section 809. Validation of Debts [15 USC 1692g]
(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector."

If a credit bureau or collection agency is unable to verify the debt:

a) They are not allowed to collect the debt
b) They are not allowed to contact you about the debt
c) They are not allowed to report the debt

Doing any one of these is a violation of the FDCPA and you can actually sue them if they don’t comply. If the collection agency tries to issue you a summons to appear in court for the debt without validating it, they are, again, in violation of the FDCPA.

So now that you know what debt validation and basically how it works, let’s take a look at how to do it.

1) Find out if the debt is past the SOL (federal statute of limitations). If it is, then write the collection agency a letter informing them that they are trying to collect a “zombie” debt, or, a debt that you aren’t obligated to pay because it’s past the Federal SOL. If they don’t remove it, you may have to file a lawsuit.

2) If the debt is not past the SOL, you may send a letter requesting validation of the debt; however if the debt is validated within 30 days the collection agency may then choose to sue you, They typically have about 30 days to respond to your letter. For the debt to be validated, they must send you:
  • Proof that the collection agency owns or has been assigned the debt
  • Copies of statements from the original creditor
  • A copy of the original signed loan agreement
If they do not include this validating information, they are no longer allowed to collect from you or report the debt. If the debt remains on your credit report, send them a copy of your first validation letter along with your certified mail receipt (validation letters should always be sent via certified mail) and warn them that they have not complied with the FDCPA and that if the debt is not removed from your report immediately you intend to file a lawsuit. And that’s what you may have to do if they still don’t comply.

Most of the time, they will respond, and if they just can’t provide the validating information you requested, they’ll send you a letter informing you that the item is being removed from your report. Then all you have to do is send copies of that letter to the credit reporting agencies and you should have no problem getting the items removed from your credit report.

Remember that the FDCPA allows you dispute only debts that you think are inaccurate in some way or another. Validation letters are not meant as an easy way to get out of debt. Just as it’s important for collection agencies and credit bureaus to make legitimate and accurate reports, you should take the same responsibility and only dispute your debts when it’s appropriate. If your debts are valid, there are legal and very effective ways to resolve them, such as debt settlement.

But, of course, if your debts are not accurate, debt validation may be the best solution to your credit problems.

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