Fixing a Bad Credit Report

Fixing Credit ReportYou can take a few simple steps to make sure that your credit report is accurate. The six steps discussed below will help you cope with a bad credit report.

1. Correct any errors on your report. It is common to find that there is incorrect information in your credit file. You have the legal right to correct this information and should do so. Accurate damaging information is bad enough. You do not also need inaccurate damaging entries. You should send a written dispute to each credit bureau that has reported incorrect information. The credit bureau by law must investigate the entry and correct the mistakes. In most circumstances, the agency is required to get back to you with the results of the investigation within thirty days.

2. Clean up your file with the help of the creditor. Provide the creditor with whatever proof you have and try to persuade the creditor that its information is inaccurate.If a creditor does agree to delete information, it can contact the credit bureau to request its deletion.  Second best, the creditor can agree not to verify its original information if asked by the credit bureau. Then, when you dispute the item, the information will not be verified on reinvestigation, and it will have to be deleted. Be sure that any agreement with the creditor to remove historical information is clear and in writing. Otherwise, creditors may not actually follow through in deleting the information.

3. Use your federal rights to remove student loan defaults. If one of the more troubling delinquencies on your credit record is a student loan default, there are certain steps you can take to remove the default notation on your credit report. Contact the loan holder and state that you want to renew your eligibility for a new loan and want a reasonable and affordable repayment plan. You have a legal right to a reasonable and affordable payment plan for this purpose. Make sure you say words similar to “I want a reasonable and affordable payment plan so that I can renew my eligibility for new loans.” These are the magic words collectors usually like to hear before they will offer you the plan.  After making nine required payments and requesting rehabilitation of your FFEL loan, the loan holder must attempt to sell your defaulted loan to a lender. If your loan is purchased, you are no longer in default, the default is removed from your credit record, and a new repayment schedule is established. The main benefit of loan rehabilitation is that if you successfully complete the process, the default notation on your credit report should be erased.

4. Clean up public record information. The most damaging information on your credit record is sometimes found from public records, such as arrest, judgments, foreclosures, tax takings, and liens. The best way to remove this information from your file is to do so at the source with the government agency supplying this information to the credit bureau, and then make sure the corrected information is updated in the credit bureau’s files.

5. Delete old information. Most bad information must be removed from your report after a certain number of years, as follows:

Seven Years.

  • Accounts sent for collection or charged off may be reported from the date of last activity on the account for up to seven years. The date of last activity is no later than 180 days from the delinquency itself. The seven-year clock does not start ticking again if the account is sold to another collection agency. However, some collection agencies will purposefully change the date of last activity to make the debt look less old, a practice called “re-aging.” If you suspect re-aging, send a dispute the credit bureau as well as the collection agency.
  • Lawsuits and judgments may be reported from the date of the entry of the judgment for up to seven years or when the judgment expires.
  • Paid tax liens from the date of the last activity for up to seven years.
  • Most criminal records such as information about indictments or arrests may be reported for seven years.

6. Send a dispute letter to all three credit bureaus. 

  • Transunion LLC, Consumer Disclosure Center at P.O. Box 2000, Chester, PA 19022-2000
  • Equifax Information Services, Complaint Department at P.O. Box 740256 Atlanta, GA 30374
  • Experian, NCAC at 701 Experian Parkway Allen, TX 75013

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