Credit Repair Tip 13

I received a call and a letter from a collection agency

It is imperative that you “force” the collection agency to prove that it’s your debt.  This requires a debt validation letter.  Don’t wait because if you may miss the 30-day deadline, this gives the collector the right to report the alleged debt to the credit bureaus if you do not dispute it.

​​​​​Validation letter

In your validation letter, let the collector know not to send you a computer printout itemizing your outstanding debt, as this is not sufficient proof according to the Federal Trade Commission opinion letters. These letters are interpretation of the law written by FTC staff attorneys. Instead, ask the collector to provide you with a copy of the following:

  • Their bond and license to collect in your state.
  • A copy of the agreement authorizing them to collect debt on behalf of the creditor.
  • An accounting statement on how they reached the amount you supposedly owe.
  • A copy of the contract you signed with the creditor bearing your signature.
  • The name and address of the creditor.

If, within 30 days, the collection agency sends proof that the debt is actually yours, try to settle the outstanding amount at a fair price.  You have 30 days to conclude your deal with the collection agency. If you can’t reach an agreement with the collector within that 30 days, they can, by law, report the negative file to the credit bureaus.

If the collector fails to validate and reports the negative file to the credit bureaus, then they have violated section 809(a) of the Fair Debt Collection Practices Act (FDCPA).  This federal act mandates that collectors must give you a chance to dispute the debt before reporting it to any credit reporting agency (CRA).​