A debt validation letter is what a debt collector sends you to prove that you owe them money.
This letter shows you the details of a specific debt, outlines what you owe, who you owe it to,
and when they need you to pay. Legally, a debt collector has to send you a debt verification letter
within five days of their first contact with you. And if not, you should ask for one.
Why? Because it helps you determine if the debt is yours and if there’s anything fishy going on
behind the scenes. Just because it looks official doesn’t mean it’s your bill to pay.

What a Debt Validation Letter Reports?

When you receive your debt validation letter, it should list several things, including:

• How much you owe.
• What creditor the collector is representing.
• An opportunity to dispute the amount of the debt within 30 days (after that, the debt will be assumed valid).
• Confirmation that if you dispute the debt within 30 days, your debt will be verified by mail within another 30 days.
• And a statement that if you request more information about the original creditor, then the debt collector or agency must provide it within 30 days.

Why Do You Need a Debt Validation Letter?

In 2020, the Federal Trade Commission (FTC) received around 82,700 complaints from
consumers about debt collectors, and a whopping 49% of those complaints were to report
attempts to collect a debt they didn’t owe, That’s definitely not okay. And that is exactly why you
need a debt validation letter. Chances are, your “debt” may not even be real or your old debt may
be a year old sold, resold, and resold some more. Creditors sell outstanding debts to collection
agencies who then release their hounds to come after you. But these agencies don’t have the best
record-keeping skills. Mistakes happen and errors are common. If you just go ahead and pay the
debt without requesting a debt validation letter, you could end up:

• Paying money, you don’t owe.
• Reviving debt past the statute of limitations (or the amount of time a creditor can legally come after you for a debt).
• Falling prey to a debt collection scam.

After a debt collector receives your request, they have to stop all forms of communication with
you until they’ve responded with a debt validation letter. That means no phone calls, no letters,
and no reporting of your debt to the credit bureaus.

In your letter, ask for details on:

• Why the collector thinks you owe the debt:
  Ask who the original creditor is and request documentation that verifies you owe the debt, such as a copy of the original contract.
• The amount and age of the debt:
  Ask for a copy of the billing statement sent by the original creditor, the amount owed when the creditor purchased the debt, the date of the last payment, and whether the debt is past the statute of limitation.
• Authority to collect the debt:
  Ask whether this agency is licensed to collect debt in your state.

You may send this letter by certified mail and request a return receipt so you can document the
correspondence between you and the debt collector. Although you can ask for many details, debt
collectors are only required to provide information on the original creditor, the balanced owed,
and the name of the person who owes the debt before resuming collection efforts.

Getting even that amount of information, however, can help you determine if you actually owe
this debt, if it is past the statute of limitations, or if there is an error such as an overstatement of
the amount owed.

How debt validation letters can improve credit scores?

A credit score is a prediction of your credit behavior, such as how likely you are to pay a loan
back on time, based on information from your credit reports.

Companies use credit scores to make decisions on whether to offer you a mortgage, credit card,
auto loan, and other credit products, as well as for tenant screening and insurance. They are also
used to determine the interest rate and credit limit you receive.

Companies use a mathematical formula called a scoring model to create their credit score from
the information in your credit report.

Factors that are typically taken into account by credit scoring models include:

• Your bill-paying history.
• Your current unpaid debt.
• The number and type of loan accounts you have.
• How long you have had your loan accounts open.
• How much of your available credit you’re using.
• New credit applications.
• Whether you have had a debt sent to collection, a foreclosure, or a bankruptcy, and how long ago.

You do not have just one credit score. Each credit score depends on the data used to calculate it,
and it may differ depending on the scoring model (which itself may depend on the type of loan
product the score will be used for), the source of the data used, and even the day when it was
calculated. Usually, a higher score makes it easier to qualify for a loan and may result in a better
interest rate or loan terms. Most credit scores range from 300-850.

A high credit score is essential to get approved for financing and to get loans at favorable rates.
Unfortunately, even a single past mistake could knock more than 100 points off your score. If
you have a late payment or other adverse credit events in your past, it can be frustrating to see
the impact this has on your score even years later. But, did you know you might be able to do
something about it? You could write a debt validation letter.

When you write a debt validation letter, you ask the creditor to remove the adverse event from
your credit report. You’re not disputing that the late payment or other mistakes happened. You’re
just asking the creditor if they might be willing to stop reporting the negative info as a gesture of
good faith. Your response to the debt validation letter helps improve the debtors’ credit score.

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