3 Tools of Credit Repair: Debt Validation, Debt Re-Aging and Dispute Letters

Credit Repair can be easy if you have the right tools. One of the hardest parts of repairing your credit report is deciphering the laws. This "how to" article is written in terms that are easy to understand and cut through the legal jargon.

Debt Validation:
Let's say you owe Mike (original creditor) $100.00 and a Guy named Steve (collection agent) comes up stating he wants $100.00 on behalf of Mike. Would you just hand him your money, or ask for proof of who he is and that he has the right to collect the $100.00?

This is called debt validation and is a very powerful tool for credit repair. Let me explain.

You can write Steve and ask for the following and he must provide it all or he cannot collect the $100.00, nor can he report it to the credit bureaus.

* - A contract between him and Mike proving he owns the debt or was hired to collect it. Think about it. If he cannot provide that contract, he is just some guy named Steve asking for $100.00

* - Account statements from Mike. Perhaps you paid mike $20.00 of the $100.00. Mike will have records of that. Steve has to provide you with that and IT CANNOT BE his own statements - they have to be from Mike.

This is important! Steve (collectors) like to provide their own printouts and this is not legal. It must be Mike's original accounting and come directly from Mike. So, here's the process to credit report repair, using Debt Validation:

Step 1: Send a letter to Steve Requesting the above information e.g. proof he has the right to collect the debt and Mike's original statements which itemize the debt and payment history.

Step 2: Dispute the debt with the Credit Bureaus at the same time.

Step 3: Wait about 30 days and you'll get a letter from Steve which will have one of the following results.

Most Common: Steve's own printout which is a violation of the FDCPA, you can then sue Steve and have it removed from your credit report. Remember, it must be Mike's personal records.

Pretty Common: No response in which case it will be removed from your credit report.

Somewhat Rare: Steve Provides the contract showing he has the right to collect the debt, a copy of the contract you signed with Mike and your payment history.