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Are collection agencies required to validate paid debts?

Established Member

Are collection agencies required to validate paid debts?

TL/DR: Can I request debt verification for a paid $65 debt in an effort to have it removed from Equifax? Or does that only work for unpaid debts? It was not a valid debt. 

 

I have a small, paid collection ($65) reporting on Equifax. I'm fully aware that paid collections under $100 don't have a scoring impact, but it irritates me to see it on the report, and I'd like to have it removed. 

 

I have reason to believe that the collection agency wouldn't be able to provide validation of the debt in the form of an original bill, which I know they're required to do for an unpaid debt, if requested, and failure to do so would require them to remove it from the credit report. 

 

My question is, if I request a copy of the original bill, are they required to provide it even though I've already paid the debt? To clarify, I'm not trying to scheme my way out of having a valid prior debt recorded; I don't believe it is valid but I paid it 5 years ago because I just wanted to get rid of it and it was relatively cheap, and at the time I was very ignorant about all things credit-related. Didn't know how to dispute, or what my rights were.

Message 1 of 7
6 REPLIES 6
Community Leader
Mega Contributor

Re: Are collection agencies required to validate paid debts?

CAs don't have to respond to debt verification letters. All they have to do is send a notice out after taking ownership and give 30 days to dispute.

 

I would just send goodwill letters to try and get them to remove it. You can try disputing it, but for an open collection you're rolling the dice. If it comes back verified, it hurts your credit. Not sure what would happen on a closed one.

 

The second reason I would recommend goodwill letters is your issue is with EQ. Most of the time, trying to get something fixed with them, makes things worse. The forum is filled with horror stories. It's so bad, people say to stay away from EE and just let it age off naturally.







Message 2 of 7
Legendary Contributor

Re: Are collection agencies required to validate paid debts?

The DV process requires that there be a debt that is disputed.

If the prior debt is paid, there is no longer a debt.

 

The debt collector could simply valaidate by stating that the debt is verified to be $0.

 

Alternately, the DV process does not mandate that a debt collector validate within any time period.

It only mandates that they must cease continued collection activities until they have sent validation.

Since they are already ceasing further collection activities since there is no delinquent debt, they could simply choose to ignore any DV request sent after the debt is paid.

 

Either way, nothing would be gained.......

 

Message 3 of 7
Established Member

Re: Are collection agencies required to validate paid debts?

Thank you, to both of you, everything you said makes sense. I'll just accept that it'll stay on. Since it's under $100 at least it's not hurting me. 

Message 4 of 7
Regular Contributor

Re: Are collection agencies required to validate paid debts?

Is that under $100 rule just for certain scoring models?

 

When I bought my first house lender pulled credit and found a single derog, a collection account for like $50. I did a PFD and my mortgage scores jumped from 700-710 to 780-790. I don't know how it affected (if at all) my other scoring models because this was before I knew anything about credit, never really paid attention until then.

Message 5 of 7
Established Member

Re: Are collection agencies required to validate paid debts?


@simplechamp wrote:

Is that under $100 rule just for certain scoring models?

 

When I bought my first house lender pulled credit and found a single derog, a collection account for like $50. I did a PFD and my mortgage scores jumped from 700-710 to 780-790. I don't know how it affected (if at all) my other scoring models because this was before I knew anything about credit, never really paid attention until then.


It only counts for paid collections, so since yours wasn't paid it still would have been having a big negative impact. I know it works like that for FICO 8, but I don't know the details of the FICO mortgage score, I would assume it would be similar but don't quote me on that. 

Message 6 of 7
Super Contributor

Re: Are collection agencies required to validate paid debts?

Collections under $100 are called nuisance collections and are not scored on version 8. On the other hand, paid collections are ignored by version 9. All collections count on the mortgage scores.

Also I think to exercise your DV rights you must send the DV within 30 days of being given the Dunning notice, so you wouldn't have any rights if they failed to respond anyway.

And if it did cause it to be updated, your mortgage scores would go down probably. They are already suffering because of it.

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 7 of 7
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