Your credit report is a snapshot of your financial activity, and any negative items can make a big difference when it comes to getting approved for loans, mortgages, or even certain jobs. Errors or outdated information on your credit report can hold you back unnecessarily.
The good news? There are steps you can take to clean up your credit report and improve your credit score, potentially saving you time, money, and frustration in the long run. Here’s how you can get started.
Steps to Remove Items From Your Credit Report
Removing items from your credit report is possible, but only under certain circumstances. The Federal Trade Commission makes it clear: accurate and timely negative information can’t be legally removed. However, if you spot something that seems off, like a mistake or a fraudulent charge, you’re allowed to dispute it.
1. Request Your Credit Report
Start by getting a copy of your free credit report from each of the three major credit bureaus. Under the Fair Credit Reporting Act (FCRA), you can request one free report from each bureau every 12 months. Keep in mind that while your report will show your financial history, it won’t include your credit score.
2. Review Your Credit Report
After you’ve gotten a copy of your credit report from each credit reporting agency, you need to review them to see which items are hurting your credit scores.
In this step, you’ll locate errors and negative information on your credit reports that needs to be corrected or removed. Pay close attention to the account information and payment history included on your credit reports and highlight any issues.
Look closely at:
- Personal information, such as the name, address and Social Security number listed on your accounts.
- Account information, including balances, credit limits, payment history and current status.
- Bankruptcy and collection data, including whether any of your accounts were marked past due for over 30 days and sent to a collection agency.
It’s also essential to make sure the item you are disputing is actually negative. You want to avoid disputing credit accounts that positively impact your credit scores.
3. Submit a Dispute
If you do find something wrong, submit a dispute with the credit bureau that’s reporting it. Before trying anything else, we recommend writing a dispute letter to each of the credit bureaus reporting the negative item. Creditors are mandated by federal law, the FCRA, to report accurate information about each account.
When a dispute is filed, the credit bureau must remove the negative item from your credit report if they cannot verify it with proper documentation.
You can dispute items on your credit reports by phone, online, or mail. But disputing credit report errors by snail mail is the most effective method for several reasons.
The three credit bureaus have 30 days to investigate and respond to your credit report dispute. However, you may sometimes receive a letter from the actual creditor requesting that you provide additional documentation so they can properly investigate the claim. This is a common stall tactic, and you’re not obligated to respond.
Ready to Clean Up Your Credit Report?
Learn how credit repair professionals can assist you in disputing inaccuracies on your credit report.
What to Do If Dispute Letters Don’t Work
If your dispute letters don’t resolve the issue, don’t worry—you still have options. Sometimes credit bureaus or creditors can be slow to cooperate, but you can try other methods to get those negative items removed.
Send a Goodwill Letter
If your dispute didn’t work, try sending a goodwill letter. This can be useful if you had missed payments but have since caught up. In the letter, you politely ask your creditor to remove the negative mark from your credit report as a gesture of goodwill.
While there’s no guarantee the creditor will agree, it’s worth a try. Be upfront about why you missed the payments. Whether it was due to unemployment, medical issues, or an autopay failure, explain your situation. The goal is to show that the missed payment doesn’t reflect your true financial behavior and that you’ve worked to get back on track.
Negotiate a “Pay for Delete” Agreement
For unpaid charge-offs or collections, you can try negotiating a “pay for delete” deal. This involves offering to pay off the debt—possibly for less than what you owe—in exchange for the creditor removing the negative item from your report.
Before making the offer, ensure you’re dealing with the right collection agency, especially if the debt has been transferred. Send your offer in writing, and wait for their approval before making any payments. Be sure to keep everything in writing as proof, in case they fail to remove the item after payment.
Consider Hiring a Professional
If you’ve tried everything and still aren’t making progress, it might be time to hire a professional credit repair service. These companies can handle the back-and-forth with creditors and credit bureaus for you. Just make sure to choose a reputable service with a strong track record.
Wait for the Negative Item to Fall Off
If all else fails, your last option is to wait for the negative item to naturally drop off your credit report. Most negative information stays on your credit report for up to seven years, though bankruptcy can remain for up to 10 years. Over time, the impact of these negative items lessens, especially if you’ve been building positive credit behavior.
Keep in mind that even after the seven-year mark, certain information may still be accessible for specific purposes, like applying for a high-paying job or large loan.
Common Credit Report Errors
Errors on your credit report can significantly impact your score, so it’s important to know what to look for. Here are a few of the most common mistakes that may show up:
Mistaken Identity
Sometimes, unfamiliar accounts or addresses can appear on your credit report due to simple mistakes. It could be the result of sharing a similar name with someone else or human error at the credit bureau. If this happens, contact the creditor right away to correct the mistake.
Incorrect Account Status
You might notice errors related to your account status, like being listed as the primary account holder when you’re only an authorized user. Other possible mistakes include wrong dates, payment information, or duplicate accounts. Most of these can be fixed by reaching out to the creditor, but if needed, you can dispute them with the credit bureau.
Incorrect Balances
Errors involving your account balances are also common. This could mean an incorrect current balance, credit limit, or lifetime account maximum. In most cases, these errors can be resolved by contacting the creditor, or by filing a dispute if necessary.
Outdated Information
Credit reports sometimes include information that should have been removed. For example, a debt that was paid off or an account closed years ago may still appear as active or outstanding. If you notice outdated items, contact the credit bureau to have them removed.
Inaccurate Public Records
Mistakes in public records, such as judgments, liens, or bankruptcies, can negatively affect your credit score. Sometimes these records are incorrectly listed on your credit report or fail to reflect updates like a resolved lien or a bankruptcy discharge.
Duplicate Accounts
Sometimes the same debt can appear twice on your report, which can be caused by errors in the reporting process or by the debt being sold to another company. Duplicate accounts can make it look like you owe more than you actually do, so it’s important to have them removed.
Credit Mistakes to Avoid
When trying to clean up your credit report, it’s important to avoid certain actions that won’t help or could even make things worse. Here are a few common mistakes to steer clear of:
Filing for Bankruptcy
Filing for bankruptcy doesn’t immediately clear negative marks from your credit report. While bankruptcy may discharge your debts and bring the balance to $0, those accounts can still show up on your credit report for up to 10 years, affecting your ability to get credit.
Closing Accounts
Closing a delinquent account doesn’t erase it from your credit history. Even if you close an account with a past-due balance, the delinquency will continue to be reported until the balance is paid off in full.
Paying an Overdue Balance
Paying off an overdue balance doesn’t automatically remove the negative entry from your report. Once paid, the account status will update to “OK,” but the late payment history remains unless you negotiate with the creditor to have it removed.
Disputing Accurate Information
Attempting to dispute accurate negative information on your credit report won’t help your case. Credit bureaus are required to report correct details, and disputing something that is actually accurate could result in wasted time and effort. Instead, focus on correcting errors or negotiating with creditors for possible removals.
Applying for Too Much Credit at Once
While it might seem like getting more credit could help, applying for multiple credit cards or loans in a short period can hurt your credit score. Each application triggers a hard inquiry, which can lower your score, especially if done frequently.
Ignoring Smaller Debts
It’s easy to overlook small debts, but they can be just as damaging as larger ones if they go unpaid. Small unpaid debts can still lead to collections, which will appear on your credit report and negatively impact your score.
Bottom Line
If you have negative items on your credit history, there are methods available to help you remove them. However, it’s essential to be patient and explore all available options. This may include disputing inaccuracies, negotiating with creditors, and getting help from a professional credit counseling agency.
It may take some time and effort, but taking the necessary steps to improve your credit history can lead to a better credit score and greater financial stability in the long term.
Frequently Asked Questions
How long does it take to fix your credit report?
Removing negative items from your credit report can take anywhere from one to six months, depending on the volume of disputes you make.
See also: How Long Does Credit Repair Take?
How often should I check my credit report?
How often you should check your credit report depends on your unique situation. If you intend to apply for credit in the near future or suspect that your personal information may have been compromised, it’s wise to check your credit report more frequently.
Different credit reporting agencies hold different sets of data about your credit history. Therefore, checking reports from all three major credit bureaus (Equifax, Experian, and TransUnion) is advisable to ensure accuracy and identify any errors or discrepancies.
Regularly checking your credit reports allows you to keep an eye on changes in your credit history, spot any potential problems early on, and take necessary actions to boost your credit score if needed.
How long does it take to clear bad credit history?
The time it takes to improve your credit score and remove negative information from your credit report varies depending on the severity of the issues and the actions you take to address them.
In most cases, you may have to demonstrate several months or even years of consistent, responsible credit use, punctual payments, and responsible debt management. However, despite the time investment and effort required, improving your credit score can have a substantial impact on your financial health and lead to better credit opportunities.
Can I pay someone to clean up my credit?
Yes, it’s possible to pay a credit repair company to help you clean up your credit. However, generally speaking, there is nothing they can do that you cannot also do for free. It’s just a matter of paying for expertise and convenience.
