What action can I take against collection agency?

Have you contacted the credit reporting agencies to dispute the accuracy of their reports? Each reporting agency has their own method. Go on the websites for Experian, Trans Union and Equifax and read about filing a dispute. Basically you will send the agency an explanation of the inaccuracy of the report. The agency will contact the creditor. If the creditor doesn't respond within a certain time period the item should be removed. If the creditor responds the agency will then decide whether to remove the item or keep it in their report. Good luck.

Collection and reporting are two different issues. If you want to validate or verify the debt legitimately, contact the creditor directly and find out what the debt is about and verify what they claim you owe. IF your validation request or other requests are simply efforts to clear a legitimate debt off your credit to get your house financed or made with expectation of resolving a disputed debt, as opposed to acknowledgment of the dispute, then you are not likely to get the relief you seek. Remember credit reporting is intended to alert new lenders about your payment history.

I agree with Ms. Wesley on how to tackle the problem with the info currently on your credit report. In addition to that action, you can improve your credit score by making new loans. After paying a loan timely for 6 months, your credit score will increase. One type of loan that can be made easily at a small cost to you is one that uses the money you borrow as collateral. This is done by placing the borrowed funds in a savings account at the same bank with the bank placing a hold or lien on the savings account. The interest rate will be very low because the bank has no risk. Even though it may seem like you are paying a monthly payment, most of the money you are paying is going to principal. At the end of the 6 months, you should have the bank use the savings account to pay off the loan, resulting in a paid as agreed, paid off loan on your credit report. Since most of the payment was paid to principal, you will have almost as much money in your savings account when the loan is paid off as you paid in loan payments over the 6 months.

The credit reporting issue really requires an attorney for this reason. If the debt collector reported the debt during a timely request for validation, this is a violation. There is an overlap between the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. You may not need a credit dispute for an FDCPA violation. You should go through the credit report dispute process but consult an attorney to insure that the proper steps are being taken.