Debt Validation Letter Checklist for Credit Repair Business Owners

It’s hard enough building up a client's credit score.

But it's even harder if someone else's debt has been wrongly attributed to them.

This isn't as rare as you might think, with 79% of credit reports containing errors or mistakes of some kind. And when a report does contain issues, it can have serious ramifications.

Firstly, it will have an impact on the person's credit score, and ultimately their ability to attain more credit.

It can also result in unwanted calls from debt collectors or even visits to their homes!

This takes a huge personal and financial toll on your clients, so it’s important to dispute the error as quickly as possible. Both to get the debt collectors off their backs, but also as a critical step in repairing their credit.

This is where the debt validation letter comes in. It’s a key part of this process and should be a key weapon in your arsenal.

That’s why I’m gonna share with you:

1. What is a debt validation letter?

2. Debt validation letter preparation checklist

3. What to do after receiving a debt validation letter

4. Frequently asked questions

By the end of this article, you'll know all the steps you need to fix these errors for your clients and continue repairing their credit.

What is a Debt Validation Letter?

In many cases, you can't just pick up a phone and call to track down items on a report. Especially collections. These get bought and sold several times by other debt collectors, which makes it tricky to identify a starting point for your debt validation request.

A debt validation letter forces the third-party creditor or debt collector to provide proof that a debt is accurate and legitimate.

When a bureau receives one, they must then provide a debt validation notice that includes:

1. Account numbers

2. Name of creditor

3. Balance

4. Confirmation that the debt is assumed valid unless disputed within 30 days

5. Statement that if you dispute the debt or request more info, they will verify the debt by mail

6. Confirmation that if they receive a request within 30 days, they will provide information about the original creditor

Ultimately, what you're requesting is written proof of the specific details of the debt.

To verify a debt, collectors must send documentation from the original creditor showing that your client owns the debt and the full amount owed.

If the debt can’t be verified, then it must be removed from your client’s credit report.

How does it differ from verification and disputing?

Before I get more into the nitty gritty here, it's important to clear something up—Validation is different from verification and disputes

1. Validation is a defensive process that can only be used with third-party debt collection companies. It’s the process of confirming details of a debt while stopping debt collectors from harassing consumers.

2. Verification is the process of establishing the truth, accuracy, or validity of something. This process requires the debt collector to stop collection efforts until they provide the required information or respond to a dispute.

3. Disputing is the process of challenging or correcting the details of a debt.

I go into this in much more detail in our blog post The Difference Between Validation, Verification, and Disputing.

Do debt validation letters really work?

In a word—yes!

In a few more words, debt validation letters are the best way to address these issues for a client. It might not be the fastest procedure, but creditors are legally obliged to follow this established process and can get in serious trouble if they don't play ball.

Debt validation letter checklist

Now, debt validation letters are really important. But they're just one part of a larger process of identifying errors and repairing a client's credit.

In this section I’ll break this process down into a checklist for you. That way you can follow each step, ticking them off as you go.

Step One - Review your client's situation

The most important person in this process is your client. So you need to know exactly what their situation is.

You need to look at their current credit score and recent credit report, so you have a crystal clear view of where they are currently. 

But you also need to know what their financial goals are. Are they trying to qualify for a home loan? Is their credit score impacting their ability to get a job?

You need to ask questions like these so you can help them to the best of your ability.

Step Two - Run an audit

The next step is to audit the credit report to identify the specific issues, and pinpoint debt that might need a validation letter.

This can be an tough and time-consuming task, but it doesn’t have to be. Credit Repair Cloud’s simple audit feature can help speed this up. You just upload your client’s most recent credit report, and we return an itemized audit you can share with your client.

This eliminates the manual process, speeding up the process at the same time.

Step Three - Write a strong debt validation letter

Right, now you’ve got the lay of the land, it’s time to bring out the big guns…

Let’s write a debt validation letter!

The easiest way to write a strong debt validation letter is using our free template. But you can also do this yourself, as long as you include certain information:

1. Your client’s information

2. A request for verifiable proof of listed debts

3. A statement that under Federal Law and the Fair Credit Reporting Act (FCRA), there is a 30-day time limit for investigation or the client has the right to sue for the FCRA violation

4. A request for speedy consideration due to the negative impact on client’s credit

5. A request for the original signed consumer contract with the collector

Did I mention you can save a ton of time with our free debt validation letter template?

Step Four - Send debt validation letters strategically

Before you go firing off letters willy-nilly, there are a few things you need to bear in mind. This is because certain trends or behaviors can be red flags to bureaus, which could slow things down.

You should always send your letters via physical mail, you shouldn’t question more than five items per month, and you should only dispute two or three items at once.

It’s also important to track these requests, so you know when they were sent, the expected timelines, who’s responded, etc. This can be done with spreadsheets, or you can use a specialist tool like Credit Repair Cloud to track this along with everything else you’re doing.

The following addresses are the best to use for the main bureaus in the US:

Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374 - 0256

Experian
P.O. Box 4500
Allen, TX 75013

TransUnion LLC Consumer Dispute Center
PO Box 2000
Chester, PA 19016

Step Five - Next Steps to Sending a Debt Validation Letter Request 

The job isn't done once the letter (or letters) have been sent. You then need to keep an eye on the timeline, making sure the creditors are adhering to the required deadlines.

If they're not, you need to chase them, making it clear as soon as they've missed a deadline or not provided the right information.

You also need to check your client's credit reports, to ensure the credit bureaus have confirmed the debt is being disputed.

What to do after receiving a debt validation letter

There are three possible outcomes from sending a debt validation letter.

The first one is also the one you're hoping for. This is where the bureau replies saying they can't validate the debt. If this happens, the debt must be removed from your client's credit report promptly.

What happens if the debt is validated?

If they reply and can validate the debt, things are a bit trickier. If you're still confident the debt doesn't belong to your client, you will have a 30-day period to dispute the debt.

After that though, there are a few things that will/can happen:

1. The debt collector can continue trying to collect the debt
2. The collector can report that the debt has been validated to the credit bureaus
3. You have a choice of either paying the debt in full, or you can try to agree a payment plan for your client

What happens if the collector agency fails to validate debt?

If you send a letter, but the agency refuses or fails to validate the debt, you have a few options:

1. Chase up with a follow-up letter

2. Dispute the debt

3. File a complaint

4. Seek legal advice

Frequently asked questions about debt validation letters

Can I Send a Debt Validation Letter After 30 days?

You can still send a debt validation letter after 30 days have elapsed, but the debt will be assumed valid and the collector can still chase you for payment.

How Long Does a Debt Collector Have to Validate a Debt?

According to the Fair Debt Collection Practices Act (FDCPA), a collector must provide the validation information about the debt either when they first communicate with you or within five days of the first contact.

What Happens if a Collection Agency Does Not Respond to a Validation Letter?

If a bureau fails to respond to a validation letter, it could mean that they are unable to validate the debt or that they are ignoring your request. If this happens you can chase the request, dispute the debt, file a complaint, or seek legal help.

How do I Get Proof of Validation Letter for Debt?

You need to send a debt validation letter to the bureau requesting they give you proof of debt. You can use our free template to know exactly what to include in your letter.

What happens if a debt collector never contacted me?

Even if no one has contacted your client about a debt, it still needs to be validated if it’s displayed incorrectly on the credit report. Simply by existing on the report, it will likely have a negative impact on your client's credit score.

It’s not over till it’s over

Unfortunately, this is rarely a one-and-done process. You may get a response that stalls the process, or you may get no response at all.

Either way, don’t be discouraged. Be clear with your clients about what their rights are, and help them take control of the situation.

Be persistent, keep records of everything, and make sure to have a strategy in place if you get a response or not. The FDCPA gives individuals the right to request all this information, so these companies have to respond.

What you should do now

Here are three more ways we can help you to repair your credit, or help your clients repair theirs:

• If you're looking to handle more clients without getting bogged down by the admin, start a free 30-day trial today makes your life easier.

• Join the "Start Repairing Credit" Challenge to improve your credit score and discover how to earn extra income repairing credit for others.

• Check out the Credit Repair Cloud blog to learn more about credit repair techniques and strategies