Credit Repair Can Save You From Collectors By Ian Webber At Isnare.com Ezine Articles

Using Credit Repair Properly

Credit repair is about more than just disputing questionable derogatory data with the credit bureaus. A truly effective credit repair service will incorporate appropriate use of all available legal leverage to protect your rights. Collectors, as a group, are particularly troubling, both as data furnishers to the credit bureaus, and in their own right as regards the accuracy of their own information management. If you have a collection on your credit report, or are contacted by a collector, there are a couple of powerful credit repair tools you can use to level the playing field, and maybe even make those collections disappear.

Collectors and the Credit Bureaus

Collectors buy and sell debt. It is not unusual for a single account to change hands four or five times in its lifetime. This is problematic from a credit repair perspective because the probability of reporting errors increases dramatically as the account moves from owner to owner, each of whom may report anew. And of course, it is because of the potential for error that credit repair is a necessity. By law, collectors are supposed to withdraw the reporting of an account upon its sale. This means that you should never have more than one collection for the same debt. If you review your credit report and discover that you have redundant collections you have a credit repair opportunity.

Collectors and You

If you get a collection letter in the mail you need to take action quickly, or if you are a member of a good credit repair service, you need to send them the notice so they can take action on your behalf. The operative law is called the Fair Debt Collection Practices Act (FDCPA) and it requires collectors to provide substantive documentation to prove that they have the legal right to collect, and an accounting of the amount claimed. Specifically they must provide you with this information if you request it within 30 days of receiving the collection notice. If the collector cannot provide the information required they are not allowed to continue their collection efforts, and if they have already reported to the bureaus they must stop reporting.

Credit Repair and Debt Validation

As mentioned, the process of requesting supporting documentation from a collector is called debt validation and must be done in writing. Like all credit repair communications it is best to keep it simple. The collector does not want to hear your story. Just ask them to validate the debt. You may specifically request proof that they currently own or have the right to collect the debt, a copy of your original account agreement, or some signed proof of your liability, and an accounting of the amount claimed due. Collectors do not have a specific amount of time to satisfy your request. If they don’t validate the debt, you win; they should disappear from your life. If they do validate the debt, you still win; now you have all the facts and are almost in a position to make an appropriate decision. But before you do anything else you must check the statute of limitation.

The Statute of Limitation Solution

The final credit repair tool that you must have in your arsenal before paying or negotiating a valid debt with a collector is the statute of limitation (SOL). The SOL is the length of time that a collector can use the court to enforce the collection of a debt. Or, in plain English, it is the length of time that they can sue you. In practice, they might sue you after the SOL has expired, but if you show up at court and claim your SOL defense the case will be dismissed. Statutes of limitation are specific to both debt type and state. SOL charts are easily found on the web. You will be happy to discover that SOLs are almost always far less than the reporting period limit. If the debt is past the SOL, and you inform the collector that you are aware of the fact, they should be very willing to negotiate. For credit repair purposes you might even try to negotiate for them to remove the account from your report; always a nice touch! Good luck!

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