Question: What if the collection agencies are fudging the CRA’s and keep it updated monthly. All of my collections are updated monthly, so that must mean that it is showing as new or current bad debt, right?
I’ve been searching for an answer to this question for a while and haven’t found anything that really tells me: 1. that what they are doing is illegal and 2. what I can use (language) to dispute it or get them to stop. Do I write them or do I write the bureau and list them all as disputed?
Answer: Collection agencies can report paid and unpaid debt to the credit bureaus. Collection accounts are subject to the 7-year reporting period on your credit reports. Meaning, based on the date of first delinquency on the original creditor account, the clock starts to tick on the 7-year reporting time period.
The collection agency cannot report past this time limit, even if the debt is sold from one collection agency to another. There are few strategies you can try in order to get collection accounts removed:
(1) Dispute the collection to the credit bureau first, if it is not verified it may be deleted and you are done.
(2) If verified as accurate hit the collection agency with a debt validation request and make sure you put in the request a cease and desist all telephone communication. You want to deal in writing only.
(3) If the debt is invalid, meaning they cannot provide proper debt validation send a letter to the credit bureau disputing the invalid debt and request it be deleted.
(4) If the debt is valid you may want to consider doing a lump sum payment in exchange for a deletion.
(5) You can also try to find a factual error to dispute in the listing, such as an incorrect amount or date and request a deletion. The Fair Credit Reporting Act says credit bureaus can only report “accurate” information.