Credit collection agencies have important jobs, namely gathering and organizing the credit information of consumers. However, from time to time, debts, credit accounts, and collection accounts might be repeated by accident. If you notice this on your credit report, you need to know what to do to fix the issue ASAP.
Read on for more information about whether collection agencies can report the same debt twice and what to do as a consumer.
Under the terms of the Fair Credit Reporting Act or FCRA, credit collection agencies – such as credit bureaus like Experian, Equifax, and TransUnion – are not allowed to report the same debt multiple times on any consumer’s credit report. That’s because collection agencies and credit furnishers are required by law to provide and utilize accurate consumer credit information.
For example, say that you take out a loan for your car. However, you miss a few payments, and the original lender decides to sell your debt to a collection agency. The original lender marks your debt account on your credit report and sends the information to the credit agencies.
Then the collection agency reports the same information to the collection agencies. As a result, the car loan debt is reported twice on your credit report. While accidental or due to miscommunication, this is still illegal activity that you can correct with the right steps.
Having the same debt reported twice on your credit report is never a good thing. In fact, it can cause long-lasting negative repercussions for your credit report and credit score.
Each negative line item, such as a charged-off debt or missed payment, decreases your credit score by a certain amount. If your credit score decreases too much, you could limit your financial opportunities. You may not qualify for certain loans or credit cards, for example, or you may even be denied job opportunities if your employer looks at your credit history.
It’s important that your credit report only has accurate, up-to-date information whenever possible. To that end, you need to know how to fix any inaccurate information on your credit report, including any debts that are reported twice.
In order to fix any debt that is reported twice on your credit report, you’ll need to go through the credit dispute process.
Your first step is to check each individual credit report. There are three, one for each of the big credit bureaus.
Fortunately, the FCRA gives you the right to one free credit report from each of the credit agencies each year. You can use these free reports to skim through your credit information and locate any erroneous info, like debts being reported twice or out-of-date info.
Next, you need to write a dispute letter to each of the agencies or credit furnishers that is responsible for the erroneous information.
Say that you find that a debt has been reported twice on your Experian credit report. Now you need to file an online dispute letter with this credit bureau. Fortunately, the credit bureaus allow you to do so online, by mail, or by phone, although filing online is ideal since it is faster.
Your dispute letter should include a breakdown of the erroneous information and substantiating evidence so the bureau or its agents can quickly locate the duplicate line item(s). Once you submit a dispute letter, the credit bureau or agency has 30 days to investigate the matter. Then, it has five days to get back to you once the investigation is complete. The same timelines apply if you write a dispute letter to a credit furnisher like a utility company.
While most credit furnishers and bureaus will correct any erroneous information, some will refuse to do so or may refuse to perform an investigation in the first place. In these scenarios, remember that you have the right to file a lawsuit.
However, it’s a good idea to contact legal experts at the earliest opportunity. The right legal representatives will strengthen your lawsuit, improving the likelihood of you recovering damages to compensate you for missed financial or job opportunities. A successful lawsuit could see you recover $1000 or more, in addition to money to cover any legal fees or related expenses.
That said, no lawsuit is guaranteed to be successful. Your legal experts may recommend a different means of resolution, like arbitration, based on the evidence you have. They may also be able to tell you to who you should file a dispute letter, which can be confusing in some instances.
Some debts or negative line items might be reported twice or more on your credit report for a variety of reasons.
For example, someone at a collection agency or credit bureau might simply make a mistake. They might list your debt twice by inputting erroneous information when filling out your credit info. Or they may receive information from multiple credit furnishers or collection agencies at the same time, not paying attention to the line items as they enter them on your credit report documents.
However, some creditors may list the same debt twice as an intimidation tactic. This is flatly illegal, but the goal is to get the borrower or debtor to pay down the debts quickly so that their credit score isn’t harmed too much in the long run.
No matter why a debt is reported twice on your credit report, you have the right to get it fixed through a credit dispute letter and legal action.
Collection agencies cannot report the same debt twice under any circumstances. If you notice the same debt reported twice on your credit report, file a dispute letter and contact the experts at Fair Credit for more information and legal support.