The FREE Credit Repair Kit by MrCleanCredit includes letters for the following: Free Cease and Desist Letter, Debt Verification, Statute of Limitations and Debt Negotiation. Learn more about how each one of our custom letters can help you with your credit repair efforts. Our Free Do it Yourself FREE Credit Repair Kit is easy to use and the processes are simple to implement.
1.) Cease and Desist Letter
This letter is a letter threatening the collection agency that any further contact via phone is a violation of the Fair Debt Collection Practices Act (FDCPA) and is designed to stop collection agencies to contacting you over the phone. At this point the only way they can communicate is via mail. This helps put you at an advantage since now all communication is documented clearly and you will always have copies of the communications.
2.) Debt Verification Letter
This letter is important in getting unverifiable debt(s) removed from your credit report. According to the Credit Reporting Agencies Act all debts must be Accurate, Complete and Verifiable. There are millions of debts that are being reported on consumer credit reports that are unverifiable. Once you send this letter to the collection agency they have 30 days upon receiving the letter to be able to prove that the debt is verifiable. The only document that can prove that it is a verifiable debt is the original contract that shows your signature and that you agreed to pay the debt. The collection agency then has to contact the original creditor to see if they still have a copy of this original contract with your signature on it. If the collection agency can’t acquire the original contract with your signature within the 30 days of your request, the collection agency can no longer report the debt on your credit report.
The FREE Credit Repair Kit includes two variations of the Debt Verification Letter:
- The first letter is to be used if you have received a letter from a collection agency stating that you owe them for a debt they purchased from a creditor.
- The second letter is to be used if you recently acquired a copy of your credit report and you noticed there was a collection being reported on your history.
More about the verification process:
The complete debt verification process takes about 45 days to complete since all letters you send to collection agencies must be sent certified mail with return receipt that shows a signature of the person at the company who received the letter. The 30 days begins the day they receive the debt verification letter and signed for it. If the collection agency is able to obtain the original contract with your signature they must mail the documents to you and this could also take a few days.
If you receive the documents from the collection agency and they are postmarked (see the area where the stamp is on the letter) before the 30 days expired then the debt is considered verified and can be continued to be reported on the credit report. At this point you would want to negotiate with the collection agency to come up with a settlement in which they agree to remove it completely from your credit report if a certain amount is paid. See Debt Negotiation Letter below.
If the collection agency is unable to send you the original contract with your signature then there are additional steps that need to be taken to remove the unverified collection from your credit report. All of the communications and documents that you have accumulated will act as documented proof that the debt is unverifiable. You will want to keep all of this information organized in a folder and even scan backups just in case the folder is lost or misplaced.
The documents that you will want to keep for the credit repair process include:
- Original letter from the collection agency
- A copy of the Debt Verification letter you send to the collection agency (two different versions)
- A copy of the Cease and Desist letter you send to the collection agency
- All copies of the certified mail receipts which includes the copy with tracking number you keep when sending and the copy you receive back with the signature)
- Any additional communications or letters that you receive from the collection agency
- Also keep the envelope that the collection agencies letters came in. It is important to keep them in decent shape with the ability to clearly see the postmark date over the top of the stamp.
3.) Statute of Limitations
The Fair Credit Reporting Act (FCRA) states that collections can only be reported on a consumers credit report for 7 years. The seven years begins exactly 6 months after the last payment was ever made on the debt. If one penny is paid towards the debt the 6 months starts over as well as the 7 years. This letter helps get collections removed off of your credit report that have exhausted the statute of limitations period.
4.) Debt Negotiation Letter
Occasionally debt collectors are able to collect the original contract with signature from the original lender or creditor and are able to verify the debt that is owed within the 30-day period that is allowed by law. If and when this happens you will want to settle the debt if you still have lots of time before the statute of limitations expires.
There are several variables to consider when settling the debt:
- Amount of the debt and can I afford to pay it in full?
- When the last payment was made on the debt
- Do I want it removed completely from my credit report? Or am I ok with the collection agency reporting that the debt was settled?
- How much time do I have before the statute of limitations
- When do I need to use my credit next? Few months or a few years?
Remember that small collections that are close to the end of the statute of limitations have less weight on pulling down your credit score than a collection of the same size that is brand new.