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Dispute Strategies

Disputing Third-Party (Debt Collectors) Records

As you already know from reading the Debt Relief section of this website, third-party records are accounts that have been written off and sold or assigned by the primary lender to a debt collector after the account was considered uncollectible.

Disputing collection accounts is an effective credit repair strategy since many debt collectors are unable to produce the information required to verify an account. When they fail to verify an account, the entire entry must be removed from your credit file.

Remember the dunning letter? After you receive it (or its verbal equivalent) you have 30 days to dispute the debt, otherwise it is deemed valid. If you receive a dunning letter, always send a verification and validation letter to the collector requesting verification of the account. Unless or until the debt is verified, the debt collector is not allowed to continue collecting efforts nor can they report the debt on your credit report.

If the debt collector continues to list the debt on your credit report, you can report them to the Federal Trade Commission and the Attorney General, as well as threaten to sue or sue them under the Fair Debt Collection Practices Act. Your goal is to have them stop collection and reporting activities because of their default on your verification request. Most likely, the collection agency will not be able to verify all of the required information and will sell it to another debt collector. You will need to repeat your dispute each time the account is sold to another collector, but that's okay. You now know how.

If you send a debt validation request after the 30-day validation period ends, the debt collector isn't legally required to respond to your request or stop collection activity on the account. That said, I have never known of a debt collector sending validation notices using any type of delivery confirmation. Since they don't have delivery confirmation, they cannot prove whether you actually received the validation.

Tip: If it has been more than 30 days since you received your dunning letter, or you never received one in the first place, try sending the Debt Validation Request For 30+ Days After Dunning Letter found in the Resource Library. Send your validation request to a debt collector already reporting a negative tto a debt collector already reporting a negative to your credit report. Wait until you get your delivery confirmation return receipt back and then try disputing the negative online or over the phone with each credit bureau. Because debt collectors are required by law to not report negatives to the credit bureaus until they provide you with verification, many debt collectors (even if it has been more than 30 days since your dunning notification) will put your account in a non-reporting status until they provide validation. Initiating a dispute during this time may mean the entry is no longer verifiable and will be deleted from your credit report!

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