Debt Validation Letters
All About Debt Validation Letters
What is a Debt Validation Letter? It’s pretty simple: It’s a letter that demands validation of an alleged debt. A collector could make a mistake on your debts, so a debt validation letter is a useful tool to have. They can be complicated, so we’ll explain them here. If you need more help, you can reach out to us.
Using a Debt Validation Letter
Start by obtaining a copy of your credit report. Once you have it, highlight the debts that you feel are invalid. Make sure there’s an actual basis for your reasoning. For example, the debt could be beyond your state’s statute of limitations, or maybe you never even owed the debt. Whatever the issue is, collect some proof for that as well.
Write your debt validation letter next. Address it to the collection agency that reported the debt, such as Covington Credit or Jefferson Capital Systems. Request the validation or removal of the debt. When you’ve got that written, send it off and request a return receipt. That way, you can know it got to the right place.
If the collection agency doesn’t respond, go up the ladder. Mail the credit bureau a dispute letter. Be sure to include copies of the credit report, proofs, request letter, and receipt. Let them know you contacted the collection agency and got no response.
When you’ve sent that letter to the credit bureau, wait 30 days. They’ll investigate the dispute letter. If the agency doesn’t respond to them either, they will automatically remove the debt. Make sure to keep checking your report. The item will disappear.
How to Write a Debt Validation Letter
It’s best to keep your debt validation letter brief and to the point. There’s no need to get angry or add any irrelevant details. Those might hurt your case. Instead, it’d be a good idea to keep it to just these few items:
- What debt you are writing about
- The information you are requesting
- That you dispute the debt and want it removed
- Your request that the creditor stops trying to collect the debt
- Your request that the creditor does not contact you for any reason outside of a lawsuit.
It’s a simple process, but reach out to us if you need help with it. We’ll be happy to help you get it just right.
Does a Creditor Need to Respond to a Debt Validation Letter?
Unfortunately, no. Creditors aren’t required to respond to debt validation letters. You have to dispute your debt within 30 days of being contacted about it. However, if you send your letter outside of that window, the creditors have no obligation to respond to it. This is also true if you react to it when you see it on your credit report. In other words, if you wait too long to send the validation letter, you’ll probably be out of luck.
You might think it’s easier to pay for deletion. There are some problems with that. You still pay the money, but the collection agencies, like Enhanced Recovery Company, and credit bureaus, like Equifax, have contracts prohibiting deletion payment.
It’s also believed that it’s easier to let the debt expire and fall off naturally. You may wonder, “How long do late payments stay on a credit report?” They can stay there for seven years, and ruin your credit score for that long. Take care of them as soon as possible.
How Can a Debt Validation Letter Help Me?
There are many ways a debt validation letter can help you. The creditor might back off upon seeing that the debt isn’t yours. You can also eliminate partial debts this way. This could potentially save you thousands of dollars. If you haven’t paid the debt, there’s still a chance they could back down. For example, they may not have the proper documentation or ownership. And even if you were unlucky enough to fall out of the 30-day window, there’s still a chance that it’d work in your favor.
What Else Should I Know About the Debt Validation Letter?
You aren’t the only one who needs to write a debt validation letter. According to the FTC, 49 percent of their complaints are for fraudulent debts. And of those people contacted by creditors, 53 percent say the debts are false or exaggerated.
A dispute to one of the credit bureaus is not the same as another. You might have to send the same letter three times over, so be persistent. A Transunion dispute is different from an Equifax dispute, which is also different from an Experian dispute. But with enough hard work, you’ll be able to get your debt removed from all three.
The debt validation letter isn’t the only way to fix your credit. It is, however, a useful way to do so. Open accounts such as credit cards or credit-builder loans in conjunction with it, and improve your score even more.
A debt validation letter is a crucial tool for getting rid of fraudulent debts. Remember, it has to be sent within 30 days of the initial contact. It helps wipe errors from your credit scores, but persistence is key. And, of course, it isn’t the only tool for fixing a credit score.
If you need help writing this letter, or with anything else related to fixing your credit, contact us. We’ll gladly help with what we can.