Force Creditor to Validate Debt (and Excuse it) – helps to rebuild the score
Now we’re going to discuss another secret that will help you with improving your credit. You should know the various excuses that are valid to dispute your debt and force your creditors to validate debt so that it can remove from your credit report. Feel free to skip ahead if you already know this.
A customer named Jill recently got divorced from her husband. She was distraught because debt collectors kept hounding her for debt her husband racked up before their divorce was finalized. Therefore, Jill was terrified of her ex-husband’s bad financial decisions would follow her for the rest of her life. However, there’s no reason for Jill to live in fear. Because after the divorce was finalized, Jil can Force Creditors to Validate Debt as she is no longer responsible for that.
While we like to think of banks as faceless monsters, they’re organizations filled with people just like me and you. Many of them will excuse late or missed payments under extraneous circumstances. Credit reporting agencies and even courts will accept these excuses too.
Here are the specific excuses Experian accepts to dispute debt as of August 2021:
– Payment never late
– Not mine or no knowledge of account
– Account paid in full
– Account closed
– Unauthorized charges
– Belongs to the ex-spouse
– Balance incorrect
– Included in bankruptcy
– Belongs to the primary account holder
– Corporate account
– The balance of history inaccurate
– Belongs to another person with the same or similar name
– Identity theft
Like I mentioned before, documentation is the key to disputing your debt. Be sure to keep copies of payment receipts, court papers, and anything else that will prove that you don’t owe the money. Use the same letter which I already discuss and add whichever specific phrase applies to you and back it up with documentation.
Jill used the phrase “belongs to ex-spouse” to remove the debt
Jill was able to prove the debts belonged to her ex-husband because she sent copies of her divorce paperwork to the creditors and credit agencies. Because Jill is no longer married to her deadbeat husband. Therefore she’s no longer responsible for his debt. Now she used the phrase “belongs to ex-spouse” and the debt removed from her credit report. So always force creditors to validate Debt.
That’s all it took to nearly double Jill’s credit report. And we don’t just divorce people. Sometimes we end relationships with our creditors too.
When do you force creditors to validate the Debt?
If you no longer have a relationship with the company, you may force creditors to validate the Debt. You can do this through your credit report dispute. It’s also a successful defense that uses by many debtors in court during foreclosure, repossession, and collection hearings.
Robo-signing was an abusive practice that was uncovered after the 2010 foreclosure crisis. Banks illegally falsified loan documents through a third party and used those documents to foreclose on people’s homes. It’s one of many secret practices that used by creditors to stick you with debts you don’t know they can fight it.
How to win against debt collectors in court
Using the law to your advantage can help you win against debt collectors in court. Here’s a secret you probably didn’t know. The Fair Debt Collection Practices Act gives you 30 days from the first notice of debt from a company to dispute the validity of the debt. If the debt collector can not provide this validation, you can sue in federal or state court for $1000 in damages. In some states like Arizona, improper debt collection practices are also a criminal offense.
If you believe that your rights violated under the FDCPA, report the violation to the Federal Trade Commission. Their website walks you through the process. Don’t let anyone abuse you, financially or otherwise. Because You’re a strong, independent person who’s capable of amazing things.
And while we’re discussing the FDCPA and FTC, let’s review some of the rules regarding how long debts can stay on your credit report. (and after being charge off, how much they can increase )
Story: Late Fee Lambada
There was one senior on a fixed income to whom we worked with, let’s call her Rose. She was in agony because she was trying to get a loan to help her daughter with a medical bill. Although she didn’t have much credit, she had a string of Store Credit Cards, from Macy’s to Sears that she kept up with regularly. As long as the coral shoes match that dress, right!
Her problem? A few late payments were devastating her score! Although the Postmark Prompt Payment Act never passed, Rose was able to pirouette around several late fees. Look, spaghetti arms.
“According to FICO data, a 30-day delinquency could cause as much as a 90- to 110-point drop on a FICO Score of 780 for a consumer who has never missed a payment on any credit account.” (Equifax blog 2014)
So, what did Rose do? She Asked! And they waived her late fees – even put it in writing. With her updated score Rose was able to get the loan she needs to help her daughter through a difficult time.
Tips: Just Ask. If for whatever reason you do make a late payment, call your Creditor and just ask for a “Waiver”. Surprisingly it works more times than not.
Jennifer, an authorized user on her fiancee account and forgot to make the payment ($37). Her score goes down tremendously (100 + points).
Now her question: Is there anything that can help to get the score up?
Answer: Please Ask your credit card issuer or lender if they can forgive that late payment. Maybe you are out of the country on vacation and you had no idea the bill existed. Credit Card Company is pretty forgiving if you have a good record of making on-time payments.
More Information about late payment negotiation
Here is an example for you. Susan’s middle-aged woman, her husband told her that he would no longer be able to work to medical issues. It is going to take months to get disability and in between the time, we will have very little income. We are not behind our bills yet, but next month we will not be able to make our minimum payments. So what should we do?
Answer: Call your creditors and explain the situation. Many issuers will help you work out an alternate payment plan or agree to waive a late fee or holding of reporting 30-day delinquency to the credit bureaus.
Tips: If you miss the payment on accident, call your issuer to see if it will abstain from reporting it to the credit bureaus or save the late fee. Most credit card companies will agree to your request if your payment history is good enough.
So, if you really make a late payment recently. There is still a chance, you can remove it from your credit reports by Ask nicely for a goodwill adjustment or Negotiate to your creditor. Therefore, if you are not at fault, reports dispute the payment.
Now we’re going to discuss another secret that will help you with improving your credit. You should know how to deal with your old debt if you have any and How to Eliminate your Old Debt.
If you don’t have an old debt then you can continue to read another secret how to stop harassing calls from the collectors or how to optimize your debt ratio to game the system. Get excited, because your life is about to change!