Regarding the ability to fix bad credit, consumers have a very important right found in The Fair Debt Practices Act. Namely, consumers have the right to have a collection account validated.
As designed by the FDCPA, the process of validation is much different than the concept of verification. Verification centers on a credit bureaus ability to verify information and this leads to a cursory examination of the account. During this examination, the consumer will decide whether or not the creditor was right or wrong to present certain information about the consumer.
When a collection agency is asked to validate a debt, by contrast, the process can get pretty involved. The collector must prove that the debt is your responsibility, and also that they have the legal right to collect it from you. Furthermore, the collector has to cease all collection activity until they provide this evidence to you. If the agency can’t validate the debt, it must end its attempts to collect on the debt and stop reporting the collections account to the credit bureaus.
It is important, however to note that the rights of validation apply only to collection agencies and not the original creditor. The reason for this is there is an assumption that the record maintained by collection agencies will be less accurate than those maintained by the original creditor. Collection agencies are notorious for chasing the wrong party or misstating the amounts that might be owned. The enactment of the validation process is a way of protecting the consumer from such problems.
In order to validate a debt, the collector must acquire documentation from the original creditor that shows the individual in question truly does owe the stated amount of money. From this, validation becomes an extremely helpful tool in terms of its ability to eradicate problem spots on your collection report. Often, collectors lack the necessary documentation. This is because such documentation becomes lost or misfiled over the years which are generally the case when several collection agencies are employed. And let it be known a mere computer printout will not be enough to validate claims made by the creditor. This is because itemization alone is not sufficient proof for the purposes of validating a debt.
The validation process can not only help you eliminate collection accounts that don’t belong to you, but it might help you get rid of some that actually do. That last statement might surprise you, particularly if you’ve heard the credit bureau company line that you can’t legally remove true, negative information from your credit report.
You will find that sometimes - not always, but sometimes - you can get accurate information removed from your file, especially if it has to do with an old collection account. Now, the bureaus and Fair Isaac will tell you that this isn’t “playing fair” - that the integrity of the credit system depends on credit reports reflecting the most complete picture possible, including all available negative and positive information.
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Tags: credit repair, Finance, fix credit, how to fix credit report, money management, personal credit, Personal Finance, wealth