As a credit geek, I'm asked questions about personal finance and money issues by friends, acquaintances and strangers all the time. My least favorite question is "What can I do about this collection account?" The answer is almost always, "Not much."

I hate having to break the news that their credit will be damaged for 7 years and there is nothing they can do to change it. So when I read the first line of this email question, I groaned and braced myself for another let down. Good thing I kept reading!

I have just been contacted by a collection agency saying that I owe over $4,000 plus 7 years interest adding up to $3,000. It looks like this account was opened in 2000.  I asked for more information but only got the amount and my last 4 digits of my social security number.   I checked my credit reports and it shows no account throughout these years with that company. 

I believe that someone has used my name and Social Security number to be a co-signer and since they have not collected from the primary, they are now coming after me.  What are my options on handling this problem?  My credit is excellent - I don't want that ruined. 

Finally! A question about collections accounts that could have a happy ending.Checking her credit reports right away was a very smart move. Since the account appears to be either fraudulent or inaccurate, her next step should be to file a dispute with the collection agency.

She only has 30-days from the day she received the letter to send back a written letter disputing the claim under the Fair Debt Collection Practices Act. Under the same law, the creditor must also tell her the name of creditor that originally had the debt. Using that name, she should be be able to track down the original account and see if it really was in her name. If it turns out to be identity theft, she should immediately follow these steps to report and remove the account.

During this whole process, she should keep detailed records of her correspondence with the collector and her investigation about the account. She may need these notes to dispute with the credit bureaus in the future. Although, it sounds like the account is too old to appear on her credit report anyway.

Next question?  Send your questions about collections accounts, credit, debts and more to tidbits@credit.com anytime.