Credit Reports and Collection Agencies: How to Combat Outdated Information

Collection agencies can be ruthless in their pursuits. In some cases, they dig up long-forgotten accounts and reactivate them, citing outdated information on your credit report and calling to collect their money. Credit repair is a long road; don’t let collection agencies stand in the way of your progress.
Collection agencies are unpredictable; it’s difficult to know when and why they bring old accounts into the present. However, a reactivated account doesn’t necessarily imply your obligation to pay. Depending on the type of debt and the laws in your state, every account is subject to a Statute of Limitations (SOL). This means that a collection agency can no longer take action against you in order to collect their money (refer to the National Association of Attorneys General for laws in your state). These “time-barred” debts are protected under the Fair Debt Collection Practices Act (FDCPA). Your SOL usually begins on the date of your last payment. Citing a Statute of Limitations is easy enough, but what’s to stop a collection agency from continually hurting your credit report? If your debt has reached its SOL and more than seven years has passed, there are ways to have negative items removed. Follow the steps below to help you file what’s known as a debt validation letter in response to time-barred information. Such letters are something like a credit dispute, except, rather the communication being an outright dispute, the collection agency is asked to prove (or lose) the debt.

    1. Obtain a copy of your credit report and highlight negative items based on time-barred information. Draft the validation letter to the collection agency, outlining the SOL laws in your state, along with your account information. Request the validation of your debt, and send the letter via U.S. Mail and request a return receipt.

 

    1. Wait 30 days for the collection agency to respond to your letter. If they are unable to provide proof of your debt—including statements from your original creditor, proof that they own the debt, and a copy of a signed agreement within the SOL—then you are one step closer to credit repair.

 

    1. If the collection agency fails to effectively respond to your validation request, send them a copy of your return receipt, validation letter, and another letter (this one being a real dispute letter) stating their FDCPA violation (section 809(b)). Ask them to remove the negative items from your credit report.

 

  1. Wait another 30 days. The collection agency will either notify you that they plan to honor your credit dispute or fight it. In some cases, you may not hear from them at all. Regardless, check your credit report to see if the items have been removed.

It’s easy to hope for the best-case credit repair scenario, but sometimes the only way to fight back against time-barred information is legal action. Consider reviewing your federal consumer rights or working with a law firm who can help you navigate your way back to good credit. Your financial future is too important to ignore.