How to Dispute Collections: 3 Steps to Protect Your Credit

To dispute collections, you’ll need to request debt validation, send a dispute letter with supporting evidence to the credit bureaus, and get verification. You’ll want to keep copies of all documentation you send or receive, including any email correspondence.

Over time, collections could hurt your credit score, making it hard to qualify for loans or new lines of credit. But just because a collection account appears on your credit report doesn’t mean they’re accurate. Knowing how to dispute collections on your credit report can help you restore your credit score. 

You’ll want to contact each of the three credit bureaus to dispute any errors you find. While it might not help you completely get out of debt, correcting those errors could boost your credit score. Here’s what you need to know. 

What Is a Credit Dispute?

A credit dispute can refer to a few things. For the purpose of this article, we’re mostly concerned with disputing inaccurate information that appears on your credit reports. However, you might also dispute collections by asking for validation of debt before you move forward with negotiating or fighting a collection attempt.

When you submit a dispute, the credit reporting agency must investigate the items in question—usually within 30 days of receiving your request. Once the investigation is complete, the credit bureau has five days to make any appropriate changes to your file and notify you of those results. 

Fixing those errors can increase your credit score and make your credit report more favorable. 

Step 1: Understand the Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) protects consumers from abusive or unfair debt collection efforts and unfair actions performed by debt collectors. Under the FDCPA, a collection agency must provide you with information that verifies the debt—including the total amount due and the original creditor—within five days of first notifying you. 

If you fail to dispute the debt within 30 days of receiving the verification information, you’re signaling to both the collections agency and the credit bureaus that the debt is yours, should be left on your credit report, and is something you’re responsible for repaying. 

Under the same act, debt collectors could sue you for the amount owed if you fail to start making payments. Keep in mind that debt collectors are bound by your state’s statute of limitations in terms of how long and how often they can contact you regarding your debt. 

Step 2: Dispute the Debt 

If you find that the debt in collections isn’t yours, is one you’ve paid off, or reflects an inaccurate balance, you’ll want to dispute the debt. Here are the steps you’ll need to take.

Receiving the Notice of Debt

When a lender sends a debt to collections, the debt collector should send you a notice that the debt is in collections. Typically, you’ll receive notice in the mail, but you may also receive a phone call from the debt collector. You have 30 days after receiving notice to dispute the debt with the collections agency. 

Failure to dispute the debt or make payments could lead the debt collector to sue you for what you owe. 

Request verification of the debt within that 30-day window. The debt collector is then required to send you the name of the original creditor, the amount you owe, and other similar information that you can use to make sure the debt is truly yours and that the collections agency’s activity is valid. As long as you initiate the dispute within 30 days of first contact, the debt collector can’t request payment until your case is settled.

Sending a Dispute Letter

If you’re filing a dispute, you’ll want to start the process by filing a collections dispute letter with your debt collector. You can do this for any type of debt, whether it’s medical debt, mortgage debt, or credit card debt. When it comes to how to write a dispute letter, there are a few key things you should include:

• Your name, physical and mailing addresses, and email address
• The account number or case reference number for each debt you’re disputing
• A clear and detailed explanation of why you’re disputing the collections
• A clear timeframe for the collections agency to respond

Keep the tone of any dispute letters for collections professional and to the point. Remember, getting emotional can make the process more difficult.

Once you write the letter, you’ll want to send it by mail. Many people send their letters by certified mail to verify that the collections agency received them. This makes it easier to ensure that the debt collector responds promptly. Be sure to make a copy of the letter and keep a receipt of your certified mail purchase for your records.

Step 3: Await Debt Verification 

Once debt collectors receive your dispute letter, they’re required by the FDCPA to send you a debt validation letter. This letter details the debt they’re pursuing, including the original creditor who reported it to the collections agency, the amount you owe, the account numbers associated with the debt, and more. 

Once you receive this information, compare it against your records. If the debt is accurate, the information reported in the letter should match your accounts and outstanding debt. If it doesn’t, you’ll want to dispute the debt by filing a dispute with each of the three credit bureaus. 

They’ll review the information on your report against the evidence you provide. If they determine that the collections agency is trying to collect a debt you don’t owe, they’ll remove the derogatory mark from your credit report. 

Keep in mind that removing inaccurate collections from your credit report may not stop the collectors from pursuing you. You’ll want to speak with an attorney and get legal help to stop their activity.

Can Disputing a Collection or Credit Item Hurt You?

The act of asserting your rights under laws like the FCRA or FDCPA doesn’t hurt your credit. However, the outcome of these actions might change your credit score or what you owe.

For example, if you dispute a negative item on your credit report, that doesn’t have any bearing on your credit score. However, if the item is removed from your credit report due to your TransUnion®, Equifax®, or Experian® dispute, your credit score based on that report may increase.

Likewise, if you ask for validation of a collection item and the agency can’t prove the debt, you may not actually owe it. In that case, you can dispute the information on your credit report, using the lack of validation documents as part of your reasoning. If the collection is removed from your credit report, your score will likely go up.

How Many Items Can You Dispute at Once?

You can dispute as many items as you want. However, for an increased chance at positive outcomes, you may want to follow some best practices:

• Address one item at a time. Misunderstandings, typos, and confusion between line items or accounts are potential reasons for credit report errors. Keep those issues out of your dispute by addressing one error at a time. The credit bureaus offer some options for disputing information online. If you use this option, open up a new “ticket” or dispute for each error. If you’re sending a letter to dispute things in writing, consider sending separate letters for each dispute. 
• Limit disputes within short periods. While there’s no limit on disputes, if you send a dozen in the same week or month, you risk that credit reporting agencies might see you as someone who’s frivolous with disputes. Make sure all your disputes are grounded in facts and that you provide documentation to back them up. Avoid sending many “try and see” disputes you don’t think you have a good case for but want to gamble on anyway.
• Keep disputes to a number you can reasonably follow up on. You may need to follow up on a dispute, send additional information, or argue your case if the credit bureau denies your dispute. If you only have the bandwidth to properly manage a single dispute at a time, choose the one with the biggest potential for benefits and work slowly through the others when you can. 

How Many Times Can You Dispute a Collection or Inaccurate Credit Item? 

According to National Consumer Law Center attorney Chi Chi Wu, there’s no limit to how many times a consumer can dispute an item on their credit report. “In some cases, it will take several disputes to resolve a matter. However, if the consumer submits the same dispute regarding the same item, it may get rejected as ‘frivolous or irrelevant.’ A good idea is to add additional information or documentation to each subsequent dispute,” Wu said.

What to Do if Your Credit Dispute Is Denied

You may wonder what happens if your TransUnion, Equifax, or Experian dispute is denied. You can keep submitting disputes to try to get the information corrected. However, you shouldn’t simply submit a carbon copy of the same dispute you already tried. If the credit bureau already denied that one, they’re likely to deny a subsequent attempt that doesn’t add any additional information.

Instead, do more research or come up with better documentation that proves your case. Then, submit another dispute with that new information. You can also submit another dispute with a different reason.

For example, you may have disputed an account on your credit report as being something you don’t owe. If the creditor submitted documentation proving that you did, indeed, own the account and owe on it, you could change your dispute to demonstrate that the amount reported as owed is incorrect. Obviously, you should only do this if you have evidence and truly believe you don’t owe the amount reported.

In another example, you may have disputed that an item is incorrect but lost. However, if it’s still appearing on your credit report past the allowed time, you could try again and argue that the item should have aged off your report.

Monitor Your Credit  

Knowing how to dispute collections is just the first step. If you believe that a debt collector is trying to get you to pay for a debt that isn’t yours or is larger than what you truly owe, quickly filing a dispute can help you restore your credit score and get the collections agency to leave you alone.

Knowing your credit score can be helpful before you file a dispute. Get your free credit assessment to find out where you stand.

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