Entries of old debts on your credit report are not only embarrassing, but they can also be detrimental to your credit score. The good news is that old debts do not last forever, as the credit bureau is required by the law to delete these entries after the credit reporting time limit of seven years has been reached. However, the bureau and creditors are not always efficient, and your old debts may linger for longer than seven years. If this is the case for you, then you should take measures to have the entries scrapped if you wish to improve your credit score. Here are proven steps for clearing old debt from your credit card.
1. Verify your dates
The first thing you should do is verify the age of your old debts to determine whether you have a legitimate claim or not. This is a tricky step for most people as they do not know the exact dates they should base their claims upon. When counting the age of your bad debts, start from the day the debt was filed with the credit bureau. Your credit report may not always reflect this date as creditors tend to sell off bad debts, and this can bring a lot of confusion. For instance, a collection agency may buy off your debt from your creditor and list it with the date it bought the debt, rather than the date the debt was originally filed. To avoid this mix-up, get your credit reports from certified reporting agencies such as Equifax and cross-check them with the reports generated by your creditor. If the date given by the creditor or collection agency does not reflect the original date of filing, then you have a legitimate claim.
2. Write to the credit bureau
The next step is to alert the credit bureau of its inefficiency via a written dispute letter. This should be based on the fact that the old debt entries are outdated since the seven-year reporting period is over. The credit bureau is required by law to respond within 30 days and take the necessary action: deleting the entries.
Several contingency measures should be taken to ensure that the bureau is accountable if it does not respond within 30 days. Be sure to send the letter via certified mail and request a return receipt as proof that the bureau received the letter on a particular date. If the bureau fails to respond or delete the entries within 30 days of receiving your letter, then you can take the matter to a federal court with the receipt as evidence.
3. Write a letter to the reporting creditor
You should also raise the matter with the reporting creditor by writing a letter similar to the one addressed to the credit bureau. Note that the creditor does not have to be the same one to whom you were indebted. In this case, the reporting creditor is the one who currently owns your debts, which is usually a collection agency. You can either send a copy of the letter addressed to the credit bureau or draft a different one altogether. It’s advisable to write a new letter and include the credit reports you obtained from certified agencies in the first step. Send via certified mail and request a return receipt as proof that the reporting creditor received the letter. Like the credit bureau, the reporting creditor is required by law to respond within 30 days. If you do not receive a response by the end of this period, then you can sue the creditor and use the receipt and original credit reports as evidence.
Please note that when writing letters to both the credit bureau and the reporting creditor, the words should be clear and polite. Although the frustration that comes with a bad credit score is warranted, being impolite in your letter will only make the situation worse.
4. Contact the regulator if you do not get a response
This option is only viable if your creditor is a bank. If the letter you sent to your reporting creditor does not get a response within 30 days, then you can contact the federal regulator overseeing the creditor’s activities. However, you will need to do some digging on the internet to find out the agency tasked with regulating the bank.
Federal regulators do take individual complaints, but you have to be as comprehensive as possible to get their full attention. The best way to do this is to print and fill out their complaint forms, and attach copies of your credit reports alongside the letters addressed to the creditor when sending the form. This will give the regulator everything they need to work with, and will definitely get the reporting creditor’s attention. On the other hand, if your reporting creditor is not a bank, you can check whether there are certain government agencies in your state tasked with regulating debt collection. If so, write to the agency, who will subsequently work on behalf of a federal regulator.
5. Talk to your attorney if everything else fails
If, after taking all the measures listed above, your creditor fails to review the old debts filed on your report, then you are at liberty to take legal action. First, look for a good attorney experienced in consumer rights cases. Since your case will fall under the Fair Credit Reporting Act, which is extremely convoluted, you can expect a lot of complications. Your attorney should have experience in this field to boost your chances of winning.
Second, be open to suggestions that the attorney may present. Since, as mentioned previously, the Fair Credit Reporting Act is relatively complicated, some elements of your case may disqualify your claim, especially when it involves time. The attorney may have some credible solutions to help you avoid committing your time and money to a case you are destined to lose. However, if everything is right, you can proceed to take legal action, banking on your attorney and the submitted letters & accumulated reports to lead you to victory.