What is Debt Validation and does it actually work?

Most people who try to fix their own credit will sooner or later run across information on debt validation. The first mistake people make when trying to validate a debt is to confuse it with debt “verification.” Let’s get this confusion clarified before we actually get into what validation actually is and how it can be used to repair a credit report.

• Debt validation refers to the process of a COLLECTION AGENCY providing a consumer with proof that a debt actually belongs to that consumer.

• Debt verification refers to the process of a CREDIT REPORTING AGENCY verifying with an original creditor or a collection agency that a debt actually belongs to a consumer.


Now that we know who the debt validation process refers to – collection agencies and NOT CRA’s (credit bureaus), we can now find out how the process works with credit repair.

The debt validation process can be found in Section 803 of the Fair Debt Collection Practices Act (FDCPA). It provides:

Section 803 (b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

Plus, they must show proof positive that you owe them this debt. It's not enough to send you a computer-generated printout of the debt. They must prove in writing that they actually purchased the debt from the original credit grantor. In addition to that, they must also foot the bill for the cost of obtaining the information from the original creditor.

One way of looking at it is like this: Suppose you borrowed $50.00 from your best friend Lisa, then her friend Brian came up to you and said he bought your debt from Lisa and you now owe him the money you once owed to Lisa. These might be some of the thoughts you would have:

1. How do you know that Brian is actually collecting for Lisa? What legal documents does Brian have to prove that he is legally authorized to collect?

2. How much is the actual debt? What payments have already been made on the account? Where is the accounting of the debt, including all interest and fees? Are these fees and interest amounts legit?

3. Do you really owe Brian the money? Or was it actually a third party, James? Where is the contract showing that you made a deal with Brian and not James?

4. How do you know if you pay Brian, Lisa won’t come back and ask for the money you originally owed her?

It works the exact same way when a collection agency sends you a letter stating that you owe them a debt you once owed an original creditor. They must prove you owe them the debt. Their word on official looking letter-head or a phone call is not enough. If the collection agency cannot provide legal proof, they are in violation of the FDCPA and can be sued. Further, they cannot continue to report the debt the CRA’s, who in turn cannot continue to list the debt on your credit report. The listing must be immediately deleted. You have this right as a consumer and the law is on your side should you choose to use it.

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Time Limitations imposed by the Fair Credit Reporting Act

As a credit repair professional I have found it necessary to stay abreast of all the current laws, and new developments in the credit repair industry. Most of credit repair law is fairly straight forward and understandable to the laymen – after all, the laws were created for the consumer who desires to address their own credit issues without having to pay anyone to do it for them. However, as with any law, interpretation can be affected by situation, context and new litigation. There are as many wrong answers out there on the Internet as there are people writing about credit repair, so be careful!


I am a member of several credit repair blogs where the members have the opportunity to write about their personal experiences dealing with their credit issues. In some cases you can learn a great deal about credit repair by reading about the real-life experiences of others who are trying to do the same thing you are doing. If you look long enough, sooner or later you will come across a person who happens to be writing about a situation very similar to your own. A word of warning though, don’t take it as “gospel” just because someone on a blog says something is true. Do your own research; check other blogs, access the Federal Trade Commission’s website, Google your question in as many ways as possible to find answers to your questions. There is nothing more valuable than doing your own due diligence.


This article addresses time limitations imposed by the Fair Credit Reporting Act (FCRA) related to charged-off accounts. What I mean here is how long a charge-off can remain on your credit file after it has been reported by an original creditor or a collection agency. There appears to be much confusion about this issue and I hope this article will clear up some of that confusion.


Section 605 (a) (4) of the FCRA clearly prohibits credit reporting agencies (CRA’s) from reporting charge-offs that are more than 7 years old. Here’s how the seven year period is calculated: Section 623 (a) (5) of the FCRA, which became law in 1997 requires a creditor that reports a charge-off to a CRA to notify the agency (within 90 days of reporting the account) of the month and year of the commencement of the delinquency that immediately proceeded the charge-off. Section 605 (c) (1) provides that the seven year period BEGINS 180 days from that date. For example, if you miss your monthly car payment (an Installment Account) and that missed payment leads to the account becoming delinquent, the credit grantor must within 90 days report the exact date when they considered the account delinquent to the CRA. The CRA must then record that date as the start of the 180 day period, after which the seven year time limit begins. Here’s an example of how the process works:



1. You miss your last car payment

2. Account goes into delinquent status

3. Credit grantor must report to the CRA month and year account was considered delinquent

4. 180 days after that month and year, seven year clock commences



Contrary to popular opinion, no subsequent event or change of circumstances can interrupt the clock once it commences, whether it be the resale of the account to a collection agency, or even subsequent payments made on the account by the consumer. Nothing can reset the seven year limitation once it has commenced.

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