If you are trying to improve your credit score but your credit report has a few shortcomings, there are a few things you can do.
Negative items on your credit report can stay there for seven to ten years, but you may want to try to remove them sooner, especially if they are the result of mistakes or identity theft. You can also try to negotiate with creditors to remove the exact negatives or hire a credit repair company to improve your credit score.
While accurately reported negative items generally cannot be removed, there are ways to eliminate erroneous or fraudulent items and even legitimate errors from your credit report. If you suspect that your credit report has negative points or errors but are not sure, start by requesting a free copy from AnnualCreditReport.com.
How long do negative items stay on my credit report?
Most negative points remain on your credit report for seven years. The only exception is Chapter 7 bankruptcy, which lasts for 10 years.
Failure to make a payment on a credit card or loan, as well as a seriously late payment will negatively affect your credit score. Other credit missteps that can hurt your account include collections, repossession, and foreclosures.
How to dispute a credit report error
Credit report errors are common, and it’s not uncommon for a credit report to include negative information about someone else, or your own credit report to contain errors.
If you see any of these errors on your credit report, you can dispute the error with the credit bureau that prepared the report. Each of the three major credit bureaus – Equifax, Experian and TransUnion – has a dispute resolution center on their website, but you can also file a dispute by mail.
When discussing credit report errors, keep the following tips in mind.
Pay attention to the time
When you dispute an error on your credit report, it’s better to do so sooner rather than later. Typically, credit bureaus have up to 30 days to investigate and respond to your dispute. Once you have all the documentation you need, it’s best to get started on resolving the problem quickly.
Keep Your Dispute Letter Simple
It is best to keep your dispute letter short and to the point. Include an explanation of the error and any supporting documentation.
For example, you can send a letter contesting a late payment notice by sending proof of payment from a creditor or a copy of a canceled check you used to pay a bill. If the error is related to someone else’s account, send a copy of your driver’s license as proof.
You may even want to dispute the bill directly with the lender before sending the letter to the credit bureau.
Do not send originals of any documents unless the credit bureau specifically asks you to do so. Instead, use copies of documents and keep the originals for yourself.
Keep track of your correspondence
When you dispute errors in your credit report, it is very important to keep track of your correspondence. Keep copies of the letters you send and be sure to date them.
When the credit bureau responds to your letter, they must send you the results in writing. If a dispute results in a change to your credit report, be sure to get a free copy of the updated report.
How to Remove Negative Items Related to Identity Theft
Sometimes negative items on your credit report are the result of identity theft. If you find that you have been the victim of identity theft, the best thing to do is to take steps to minimize the damage to your credit report.
The first step is to immediately receive your credit reports from all three credit bureaus. If you find negative information, file a police report and add a fraud warning to your credit report. You can also request a credit report from each of the three major credit reporting companies.
To remove identity theft elements of a negative credit report, the best place to start is by filing a dispute with the credit bureau or the company that provided the information to the bureau. If the dispute is determined to be accurate, you may attempt to include additional documentation to support your request.
Other ways to remove negative elements
Sometimes it is possible to remove accurate negative information from your credit report by working directly with the lender. For example, you can try to remove late payments on your credit reports by writing a goodwill letter. A goodwill letter is a note you send to your credit card issuer or lender explaining why you missed a payment. For example, if you were hit by a major hurricane and had no electricity for several days, you may not have been able to pay your credit card on time. In general, letters of recommendation work best if you have been a responsible borrower in the past and your credit error is an anomaly. However, your creditor is not required to grant you a pardon.
If you have a debt that is long overdue and being pursued by a collection agency, the collector may want to negotiate a payment for you in exchange for removing an item from your credit report. However, this practice is contrary to the standards for collecting consumer data.
Should I hire a loan repair firm?
Credit repair companies can help you improve your credit score by challenging inaccurate information on your credit reports. However, there are many scams in the credit repair industry.
If you are considering hiring a credit repair company, you should do your research to find out if the company is legit. Check if there are any complaints about the company in the Better Business Bureau and read reviews from previous clients.
Credit repair costs can range from $69 to $149 per month, depending on the services offered. The process of improving your credit score by challenging inaccurate information on your credit reports can take anywhere from a few months to a year.
bottom line
While negative items remain on your credit report for up to seven or 10 years, there are ways to remove them sooner. You can dispute credit report errors with credit bureaus or try to negotiate directly with the lender. You can also hire a credit repair company to improve your credit score.
To prevent negative things from showing up on your credit report, practice good credit habits in the first place, such as paying your bills on time every time and checking your credit report regularly.
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