Stage #1 of the Credit Repair Process – Validation

Stage #1 of the credit restoration process, leverages a law known as the Fair Debt Collections Practices Act in conjunction with the Fair Credit Reporting Act. This stage involves sending letters directly to the creditors asking them to validate the debt.

Stage #1 is called Validation –
The primary law that you are leveraging in this step is the Fair Debt Collections Practices Act which came about in 1978.

Validation focuses on any outstanding debts you have on your credit report from Debt Buyers or Primary Debt Collection Agencies.  This step does not apply to 1st or 3rd party collectors.  1st party collectors are the original creditors and 3rd party debt collectors are simply hired to collect on behalf of the 1st party creditor.  This step DOES apply to collection agencies that have purchased the debt from the original creditor after they have been charged off which is usually once the debt becomes 180 days delinquent.

Debt validation is done by sending a letter to the collector asking them to validate the debt.  They need to prove that the consumer is indeed the one who owes the debt and the amount that is legally allowed to be collected.  The debt buyer will usually attempt to provide an original contract with account numbers or statements that link the consumer to the debt along with a balance.  There is no time limit for the collection agency to respond but they must stop attempting to collect from you until they do respond.  The fact that they stop attempting to collect however, does not remove the negative item from the consumers credit report.

If you do not receive validation from the collector, stage #2 comes into play.
If they do respond but can’t provide the information you asked for, send a letter demanding removal from the credit file because they cannot substantiate that the debt belongs to you and go to stage #2.

One important point to keep in mind is that collection agencies are rather brilliant at conveniently losing or not receiving your letters so make sure you send your validation letters via certified mail and schedule a follow up call to make sure they got it.

Record all conversations, dates, times and representatives in a notepad for reference and for likely future use if they attempt to deny you of your rights.