If you fail to pay a creditor on time, that creditor has the right to turn your debt over to a collection agency. Some collection agencies report to the credit bureaus--causing the debt to appear on your credit report for up to seven years. All collection accounts are derogatory and damage your credit rating. According to the Federal Trade Commission, accurate negative information must remain on your credit report for the full duration of the reporting period. If a collection account appears on your credit report in error, however, you have the legal right to dispute the debt and its appearance within your credit history.
Step 1
Contact the collection agency that owns the account. Request the name and address of the original creditor for the debt. According to the Fair Debt Collection Practices Act, a debt collector must provide you with this information should you request it. Although you may make your request over the telephone, sending a request via mail allows you to keep documentation of all of your communication with the collection agency.
Step 2
Call the original creditor for the debt and explain that a collection agency is attempting to collect the debt from you when you do not owe it. Ask that the original creditor send you a statement acknowledging that you do not, nor have you ever, owed the creditor the debt that the collection agency claims that you owe. Although a statement from the original creditor isn’t vital to have a collection account removed, it adds legitimacy to your claim that the debt does not belong to you.
Step 3
Make a copy of the statement from the original creditor demonstrating that you either never had an account with the company or never owed the amount in question. Write a letter to the collection agency notifying it that this debt appears on your credit report yet does not belong to you. Inform the company it has 15 days to remove the debt from your credit report.
Step 4
Mail your letter, along with a copy of the original creditor’s statement, to the collection agency. Choose certified, registered or express mail and request a return receipt. A return receipt forces a representative to sign for your letter. This prevents the company from being able to claim that the notice was never received.
Step 5
Pull your credit reports 15 days after the postal service delivers the return receipt to you. If the collection account still appears on your credit report, write a letter to each credit bureau and formally dispute the error. Include copies of any documentation you have, including a copy of the original creditor’s statement, that support your claim. The Fair Credit Reporting Act gives each credit bureau 30 days to review your dispute and attempt to validate it with the information provider. If the collection agency cannot validate the information to the credit bureaus, the credit bureaus must delete the entry.
Step 6
File a lawsuit against the collection agency if it verifies the accuracy of the information with the credit bureaus. Reporting incorrect information is a violation of the FCRA and is illegal. Winning your lawsuit will result in a judgment against the collection agency and the court will force it to remove the negative entry from your credit report. Many collection agencies, however, will voluntarily remove a collection account from your credit report rather than fight a lawsuit.
Tips and Warnings
- Take action as soon as you notice the inaccurate collection account on your credit report. The Fair Debt Collection Practices Act gives you 30 days from the date the collection agency either contacts you about the debt or you first become aware of the debt to request the name and address of the original creditor and dispute the debt. Although you may dispute credit report entries with the credit bureaus over the phone or Internet, the Federal Trade Commission recommends that you send your credit disputes via mail. This allows you to send supporting documentation. You do not need an attorney to file a lawsuit against a collection agency. Each court district’s guidelines vary. Check with your local county clerk to find out how to file a lawsuit in your district.
- Any personal information you give to a collection agency can be used to update information about you in the company’s computer system--making the debt easier to prove in court. Refrain from giving a collection agency any personal information about yourself other than your name and address.
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