Collection Agency Reporting a Debt on Your Credit Report

Often times in an attempt to collect a debt, collectorsPast _due _img will threaten to report accounts to the credit
reporting agencies if you refuse to pay.  Debt collectors use
this threat as a scare tactic and it usually works as many
consumers have a great deal of concern for their credit
standing.  There are both permissible and impermissible
circumstances in which a collector can and cannot report your
debt.

Is it permissible under the 
Fair Debt Collections Practices Act
(“FDCPA”) for a debt
collector to report charged-off debts to a consumer reporting
agency during the term of the 30-day validation period detailed in

Section 1692g
?  A debt collector may accurately report a
debt to a consumer reporting agency within the thirty day
validation period.  Under the FDCPA, you are allowed to
request validation
of this debt and the collection agency must
show proof that the debt is valid and that you owe the debt. 
During this time the agency must mark the account as disputed to
the credit reporting agencies and if unable to validate must
actually order a deletion of the account on your report. 

When a collection agency receives a debt to collect from the
original creditor, it has the right to report that debt to the
credit bureaus.  Reporting the debt on your credit report is
viewed as collection activity and the reporting may have a
significant effect on your credit score.  In some cases, you
can prevent a collection agency from reporting your debt to a
credit reporting agency.  The first way to avoid the collector
from reporting is by agreeing to pay the debt.  As previously
explained debt collectors use the threat of reporting the account
on your report as a tool to negotiate payment.  By agreeing to
pay you may avoid damage to your credit, but you must ensure,
usually in writing, that the collector will hold up its end of the
bargain and not report. 

If you do not owe the debt, either because it does not belong to
you or because it is inaccurate, you may dispute the debt in
writing pursuant to the
FDCPA
.  If the dispute is within the original 30 days
period as described above, then until the collection agency
provides you with the requested information, it cannot conduct any
form of collection activity– including reporting the debt to the
credit bureaus.  If the 30 day period has passed, you can
still write a dispute to the collector, and the collector must
report that the account is disputed on your credit report.

The final situation in which a collector cannot report a debt on
your report is when it is past the time allowable for reporting the
debt under the Fair Credit
Reporting Act
(FCRA).  The “FCRA” states that delinquent
accounts can appear on your credit report for 7 to 7 and a half
years from the date you defaulted on the original account.  If
a collection agency threatens to report a debt on your credit
report beyond the legally permissible amount of time, you may have
a claim under the FCRA for
violating your rights.

Should you feel a collection agency has erroneous reported an
account on your credit file contact
SmithMarco, P.C
. for a  free
consultation