I've refreshed my recollection by reviewing the previous Q&A session.
You can file a dispute with each of the three major credit reporting agencies (CRAs: equifax.com; experian.com; transunion.com). The CRAs are legally obligated under the federal Fair Credit Reporting Act (FCRA
) to attempt to "validate" the alleged negative report. However, in practice, this validation frequently consists of asking the organization that has provided the negative report, as to whether or not the report is correct. If the organization says, "yes," then the CRA simply reports back to you that the debt has been validated, and you'll have to deal with the reporting organizations.
This is not entirely true -- you can sue the original reporters and you can sue the CRAs. Assuming that you were to prevail in small claims court, by default (since it's practically certain that no one will show up to defend), you could use the judgment as proof to the CRAs that the debt is invalid. However, a small claims court judge cannot order a CRA to remove the bogus negative report. You can only get money damages
(up to $1,000 from each defendant, but no more than the state maximum award in small claims: $5,000). Consequently, you may end up having to sue the CRA in civil court for a second violation of the FCRA. That would require hiring legal counsel, in my opinion.
But, that's probably how I would try to handle the issue: (1) dispute letter to CRAs; (2)small claims suit; (3) hire lawyer.
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