It’s not uncommon for one collection agency to sell an account to another agency, when they have been unsuccessful in collecting the debt. So the history and status of a collection account can become blurred, distorted or lost over time.

In some cases, a collection agency will attempt to collect on a debt that has already being paid or one that was discharged in bankruptcy. Or, you may be contacted about a debt that does not belong to you, or one with an amount different from what you actually owe.

Validation Means Proof

Before you pay a collection agency any money, you should validate the debt. Essentially, validation proves that you did have a legal contract with the original lender, that you do owe the amount the collection agency says you owe, and it is confirmed that the collection agency is authorized by the creditor to collect the debt.

How to Validate

When a collection agency takes over your account, they will first mail you a written notification of their intent to collect on the debt. In that initial mailing, you should be provided with instructions on how to request validation of the debt from them.

Put your validation request in writing and mail it to the collection agency by certified mail within 30 days of receiving their notification. The agency then has 30 days to provide you with proof that:

• They have been authorized by the creditor to collect the debt
• You had a legal contract with the original creditor (usually a copy of the original contract)
• You owe the amount they are requesting

If the collection agency does provide the evidence listed above within the 30 day time line, you will be obligated for the debt, and they are allowed to proceed with the collection within the limits of the law.

If they do not provide you with this proof within 30 days, they are required by the 1978 Fair Debt Collection Practice Act (FDCPA) to cancel the debt and discontinue collection proceedings against you.

If they do not respond to your validation request, but continue to attempt the collection of the debt, your next step is to submit a written letter to the three major credit bureaus – Experian, TransUnion, and Equifax – explaining that you are disputing the collection activities of the agency. Also, send notification to the agency alerting them that they have violated the FDCPA and that you will take further legal action if they do not cease their collection activities.

Remember you only have 30 days from your receipt of the original notification to request validation of the debt. If you wait past the deadline, the debt will be considered valid and you will be required to pay it

Go here for an expert’s advice on the best way to validate your credit files.

Negotiations

One mistake some borrowers make in negotiating with debt collectors is, they attempt to elicit sympathy from the collector on the phone. Realize that debt collectors hear these stories every day and are rarely moved. They are just doing their job. Instead, stick to the subject at hand and remain unemotional. You will be in a much better bargaining position if they see you are remaining composed and unruffled as you work with them.

The age of the debt will be a factor in your attempt to reach a satisfactory agreement with the collector. For example, if a credit card company debt of $2,000 is two years old, you may be able to settle the debt for 50% of the balance, or $1,000. If the debt is older, you may be able to settle for 25 to 30% of the balance.

Debt collectors are unlikely to take your first offer but these targets are a good starting point. Knowing that the first offer may be refused, a skilled negotiator might start even lower, and then allow themselves to be “talked up” into their target goal.

The above examples are for a discounted payoff of a debt. You may also negotiate for a lower interest rate, longer payment term, a reduced balance of the debt, or any combination of those terms. When an account is so bad that it has gone to collection, all things are negotiable.

Post-Negotiations

Once you have reached an agreement over the phone, you should immediately write down (in letter format) the specific arrangements you agreed to. Be sure to include the name of the person you spoke with, and the date and time of the call. Sign the letter and send it to the debt collection agency via certified mail so you will have proof the letter was mailed and received by them. Keep a copy for yourself as well.

Having something in writing will protect you in case there is a future dispute over the terms or in case a different agent from the firm attempts to contact you.

Date of Last Activity

As a side note, many people believe that settling an old debt like this will remove it from their credit record. However, the law says that a collection debt can stay on your record for up to seven years from the date of last activity. Since paying off the old debt becomes a new activity, the debt will remain on your credit record for seven years from the date of payoff.

The same is true if you negotiate an agreement that calls for making monthly payments. The last activity on the account will be the day you make your last payment, and the seven year clock will start from that date

Become a negotiating pro with these tips. Get your way every time!

Raise Your Credit Score Fast

If you need to raise your credit score fast, here are some strategies that can give your scores a quick boost.

Check Your Credit Reports

You can raise your credit score fast by having inaccurate information removed from your credit reports and keeping them accurate. The three major credit bureaus: Experian, TransUnion, and Equifax, are notorious for containing errors in credit reports.

Some errors, such as a misspelled name or out-of-date address, are not cause for concern, but should be corrected. Other mistakes can lower your credit score dramatically, so look for them. In order to raise your credit score fast, begin work immediately on having any inaccurate items on your credit report removed.

Look for accounts that do not belong to you and any outdated items remaining on your report which should have dropped off the report by now. Slow pays and late payments should only stay on your report for 7 years, collections for 7 years from the date of last activity, a foreclosure 7 years, and a Chapter 7 or Chapter 13 bankruptcy, 10 years.

You should dispute any mistakes and errors through the respective bureau. Send your dispute in writing stating that the entry is inaccurate and asking them to remove it. The credit bureau has up to 30 days to investigate your claim and make a decision to either remove the item from your report or to let it stand. They must notify you by mail of their decision.

Look at Your Credit Cards

Credit cards, if managed intelligently, can be a good way to raise your credit score fast. First, look at the balances on your cards. If one or more of your cards has a balance of more than 35% of your credit limit, this will have a negative impact on your credit score. A fast way to help improve your credit score is to pay the balance down below 35% of the high limit.

Piggybacking

Despite its’ virtually unlimited potential, piggybacking is not used by nearly as many consumers as it should be. It’s easy, effective, and extremely fast. Unfortunately, it’s mostly used among parents and siblings while those who can really benefit stay in the dark.

How it works. Almost every credit card or credit account will allow the primary account holder to add on (at a later date) what’s known as an “Authorized User” or “Secondary Account Holder”. In most cases, when this is done, the entire account history (retroactively) gets posted to the authorized users credit report regardless of their current age or credit history!

For example: If it’s a credit card with a $10,000 limit which has been paid as agreed for the last 10 years, then that complete history will be posted to the authorized users’ credit report.

In the end, we need to remember that today our credit score is more important than it has ever been in the history of the credit reporting system. While credit miracles don’t happen overnight, you can create your own credit miracles by applying simple insider strategies consistently overtime. Before you know it, you’re a proud member of the 700 Club. The “700Plus Credit Score” club that is.

If you want serious results in raising your credit score fast, this is all you will need.