It’s always smart to keep an eye on your credit score and report. I’ve been focusing on this lately, and I’m thrilled to say that my credit score has significantly improved thanks to a few simple actions I took. Here’s what was holding me back.
I’m usually pretty good about paying my bills on time. But a year ago, my wife and I moved to a new city. Although we settled our utility accounts before moving, my credit report showed an unpaid partial month. Because we changed addresses twice in three months, I never received written confirmation, and we weren’t notified any other way. I only discovered the negative mark on my credit report while checking AnnualCreditReport.com, after the debt had already been sent to collections. Fortunately, this was the only issue on my report.
Around the same time, I received a letter from the collections agency stating they had purchased my debt. The amount was small, but I decided to ask for validation of the agency’s right to the debt. By law, they must prove they have the right to pursue and demand payment. These regulations are designed to prevent old, predatory practices that were once common in the industry.
Thankfully, the laws are rigorous. Unless the collection agency provides detailed proof that they own the debt and that the charge is valid, they must clear it from your record. Errors on credit reports are pretty common because the three Credit Reporting Agencies get their information from all your lenders and creditors, creating many opportunities for mistakes.
To remove disputes from your credit report, you need to make the agency prove the validity of the debt. They might find it easier to delete the item rather than gather all the required materials. Here’s a letter I sent, which you should personalize if you decide to send one:
1. Identify the debt they claim you owe by providing the company name and account number.
2. Explain why you believe it’s an error.
3. Get a certificate of mailing to prove you sent the letter. You have 30 days from when the collections agency contacts you to act.
4. Tell them to either verify the debt or remove it from your account.
5. Specify that they can only contact you by mail.
A few weeks after sending the letter, I received no response from the collection agency. However, about a week ago, Experian notified me that my credit score had jumped 57 points. When I checked, the negative item was removed. This was my first time using the debt validation requirements from the FTC, and the quick resolution significantly improved my credit score.
I wish the mark had never appeared on my report. Considering my wife and I made some major purchases last year, we could have potentially secured lower interest rates with a higher score. Moving forward, I’ll be more vigilant.
Luckily, this was my only negative mark. If you have more, check out AnnualCreditReport.com’s credit report and dispute filing page, and the FTC’s information on disputing credit report items. It might take some effort, but improving your credit history can make a big difference in interest rates and future financial opportunities.
Take advantage of these resources to improve your credit standing. It can have a substantial impact on your financial future.
