Credit Repair-Using the One-Two Punch For Collection Accounts

Quite often collection agencies will just place an item on one or many credit files. This item will lay dormant until you decide to apply for credit and it becomes known.

The law states the collection agency must send you notification of your rights to dispute. You have 30 days to dispute the account or they can assume it is accurate. Once they are able to make this assumption they can legally report it.

Unfortunately for consumers, collection agencies often fail to comply with the laws regulating their business. They report the account and lay in wait for you to notice it and find them.

Many times the victims of these tactics will just pay the account. Then it is legally reported for the next seven years.

When you notice that collection account on your file, here is how to proceed.

1) Send off a DV request to the collection agency. Always include a statement of first contact when you send the initial communication to them.

2) Wait five days, or until you can verify the receipt of the letter by the collection agency.

3) Send in a dispute to the credit reporting agency for the account.

4) Wait for the response from both.

Odds are you will never hear anything from the collection agency involved. The odds are also that the credit reporting agency will verify the account, even though it is a violation of the law for the collection agency to respond to the verification request before validating it to you.

How can this happen? Well, the credit reporting agency doesn't actually contact the furnisher in most cases. Instead, they run a cursory check of their own, or a third party computer system for verification. If the account is in more than one computer it must be accurate, right?

If an account has been verified using the one-two punch, it is a certainty that the law has been violated. These violations are the weapons you need to force these entries off your file.

If your one two punch comes back verified, here's what to do.

1) Send the credit reporting agency a letter asking how they verified it. Tell them the collection agency couldn't verify it for you so you want to know how they were able to verify it.

2) Send a followup to the collection agency asking why they verified the account when they have failed to validate it first.

3) Wait for the response.

In many cases the result will be a deletion and you are done. In others, they will continue to fight. Each swing they take is a violation once you have started the one-two punch tactic.

Keep very good records of all of their violations for use later if needed.

If they continue to fight, here is what to do.

1) Inform the credit reporting agency in a letter of the fact that they are in violtion of the law by failing to do a legitimate dispute and ignoring the evidence you have presented. Parroting a furnisher is not enough to satisfy their legal obligation.

2) Inform the collection agency that they are in violation of the law by continuing to report the unvalidated account.

3) wait for the response.

If they have still not deleted it, you will have to write an Intent to Sue letter and a complaint suitable for filing in court. Ask them for the damages you are owed, and outline their violations.

Give them 10 days to respond. In most cases, a deletion will occur within a short time. In others, you will have to file the papers.

If they push you all the way to filing, a deletion is no longer suitable and you must make them pay for their acts. If you have a good case (and you will), you can usually get them to pay you a few hundred dollars. It is far cheaper than it would be to fight the case.