Removing 3rd Party Collections From Your Credit Report

The most common negative credit that I see on credit reports are "collection" accounts.  If you have them, you are part of the majority.  There are a number of reasons to get them off of your credit. First, they're bad.  Who wants bad stuff on their credit report?  But here's a few other reasons: 

• They lower your FICO score
• If you pay them, they are still bad
• If you don't pay them and try to get a mortgage, you will have to pay them
• If you refinance your house, escrow will take part of the money and pay them
• Your interest rates on new credit, auto loans, house loans, refi's, etc. will be higher
• And the most important one in my opinion -- YOU DON"T OWE THEM ANYTHING!!

One of the problems with collections is if they can't collect from you, they leave bad and negative information on your credit report, but then they sell it to another collection company and the harassment and negative reporting on your credit report starts again.  They ding your credit with non-permissible pull inquiries, then they go and claim you have an outstanding debt with them and drop your FICO score some more.  Some will even sue you.  You need to get them OFF!

It starts with Validation.  If and when you receive a letter from a collection agency, you need to respond right away.  Write a letter to them, preferably within 30 days, disputing the alleged debt.  Tell them you are not asking them to Verify (as in name, address, etc.) being correct. You are challenging the validity of the alleged debt and they need to send proof that you owe them.  Send your letter to them certified mail with return receipt.  It costs you about $5 - $6 bucks but its worth it.

If you did not receive a letter from the collection agency and you found out about it because you saw it on your credit report, when you write the letter, tell them that you have received a recent copy of your credit report and were stunned to find out that they have put false information on it.  Then you follow through with demanding validation and that you're not requesting verification.  The credit report should have their contact information on it - mailing address, not phone number.  You NEVER want to talk to them on the phone.  They are trained to intimidate, pressure you, get money out of you, get you to admit something, any and everything they can, and intend to and usually do, control the conversation.  You do NOT want this scenario.  Stay off the phone and keep all communications in writing.

After you get the green card back from your certified letter, now you can dispute with the credit bureaus.  Collectors are not allowed to verify with credit bureaus until they provide validation.  Remember, validation means proof, real proof that you owe them.  Proof is not some bill or computer generated statement with your name and their account number on it.  Proof is an actual contract between you and them, that you actually signed and they actually signed.  It is documentation of monies given to you with an accounting of every cent used, every cent paid, every bit of interest applied, and the date any of those events occurred.  

They may claim you had an original account with some other party and they have been assigned the right to collect it.  They need proof of everything about that as well. They need the original contract between you and the original creditor with your true signature and a qualified employee of that original creditor, they need the full accounting, they need to provide proof of the assignment or the purchase they made from the original creditor.  

I really need to make a comment here about original creditor information requested from a 3rd party collector.  I mainly ask for it just to force them to do some work.  Personally, I don't give a rip if they can provide it or not.  If not, they go away a bit faster, but since they are not on the original contract you allegedly signed with the original creditor, they have nothing and you owe nothing.  3rd party collectors are NOT ON ORIGINAL CREDITOR CONTRACTS!  Therefore, you OWE THEM NOTHING, NADA, ZERO, ZIP, ZILCH!

Remember this and quote this when they try to claim they have rights to collect:
The right of subrogation does not exist for a stranger to the transaction.  73 AmJur 2nd, Section 90.  

Now I will explain this in common, easy to understand language. "Subrogation" means to substitute. "Does not exist" means is not allowed. "Stranger to the transaction" means someone or some entity not on the original contract.  So, here we go again in easy to understand wording:
There is no right to substitute someone or some entity that was not on an original contract. It is not allowed. 
 Now, this includes attempts to collect based on assignment, sale/purchase, or trade.  See?  The collector cannot substitute himself to collect money because he believes he was assigned the task or he purchased the bad debt, or traded some bad debt for a different bad debt.

Now, in order to get the bad or negative credit off your credit report, you have to dispute with the bureaus.  I generally don't recommend saying "its not mine" because you want to save that one for a last resort and if you do, they'll usually put fraud alerts on and want you to provide some identity theft stuff to them.  However, you can say it in a way that gets the same message across.  You can say, "I have never done business with this company and I have no idea who this company is."  You can almost always find plenty of other errors in the way they report as well.  They usually say you have late payments or your date of last activity was prior to the account being open.  An account has to be open before you can be late on it -- common sense there! Challenge dates, challenge amounts, challenge the account number, but only challenge 1 error at a time.  If you keep challenging the same thing or things with every dispute, they will send you the dreaded "frivolous" letter and refuse to re-investigate. 

If the collection company obeys the law, they will not verify with the credit bureaus because they haven't provided validation.  That is the best possible scenario.  It happens many times.  But, there are also many times that they just ignore the law and verify again.  You will need to send follow up letters to the collectors and follow up letters (repeated disputes) to the bureaus if they don't come off right away.  Don't expect them to come right off, right away because they are all scum.  Expect to fight. Expect to have to wear them down. But, be pleasantly surprised and proud of yourself for fighting back when they do come off.  Its a wonderful feeling and a beautiful sight!

If there is more information you need me to delve into on this subject, please leave me a comment below.  I will get it and I will respond.  I may even write a whole new post addressing your questions or different situations you need help with.  If someone posts a comment and you have a similar question, please add your comment too.  I want to be able to help as many people as I can.

If you are tired of dealing with these liars, thieves, scum sucking, extortionists called 3rd party collectors and debt buyers and are tired of the back and forth fight you have to stay on top of, I would love to assist you in the fight.  My partner and I have been at this successfully for 50 years combined.   I love the fight and am passionate about helping others get rid of the bad credit that is holding them back.  I get tons of emails about how my assistance has helped people get jobs, buy homes, cars, and start over.  I would love the opportunity to help you too!

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