Having negative items on your credit report can keep you from getting credit for up to 7 years. As such, it is prudent to get rid of any items that may tarnish your credit score. If you hope to get a car title loan, insurance, mortgage, or even secure a new job, it’s in your best interest to have a good credit score. Below are pointers on how to clean your credit report.
The Federal Trade Commission mandates that “no one can legally remove accurate and timely negative information from a credit report.”
Even so, suppose there is an item in your report that is questionable or portrays a false representation; it is within your right to file a dispute. Furthermore, you can put forward a request for an investigation of the wrong entry.
Reviewing Your Credit Report
The first thing you need to do after picking up a free copy of your credit report is to review it. Keenly go through the numbers to pinpoint the items that are hurting your credit ratings.
The review process is vital. Through it, you’ll be able to determine any negative items and errors in your credit report that should either be removed or rectified. Examine the account information keenly and note down any discrepancies.
It is wise to ensure that the items you dispute hurt your credit score. It would be unfortunate if you removed an item that positively affected your credit rating.
Submitting Dispute Letters To The Credit Report Bureaus
After you’ve identified any errors in your report, the best course of action would be to write a letter of dispute. The federal law, the Fair Credit Reporting Act (FCRA), mandates that creditors report accurate information about each account on the credit report.
Suppose creditors fail to support their entries with proper documentation in the event of a dispute. There are different ways of disputing credit reports. You can either do so online, by mail or via phone. However, several reasons make snail mail the most effective way.
Upon submitting your report to the credit bureau, it has 30 days to investigate and respond to your complaints. Nonetheless, there are instances when you may receive a letter from the creditor requesting that you provide them with additional information to help them investigate the claim.
Most often than not, creditors use these letters to stall the dispute resolution process. You, however, are under no obligation to respond to these letters.
Steps To Take
Dispute letters are usually effective in solving credit report disputes. However, there are times when creditors or credit bureaus fail to corporate. Do not fret. You still have other viable options to have the issues removed.
Request For A Pay For Delete Arrangement
Suppose you have unpaid collections or charge-offs. You can come into an agreement with the creditors to settle the debt in exchange for deletion from your credit report. You can even negotiate to pay off a lesser amount than the one you owed. There are collection agencies that agree to a settlement that is far lower than the amount owed.
However, before reaching a deal with a collection agency, make sure that you choose the right one. There are instances when debts move from one agency to another. In such a scenario, it would be better to have them deleted by filing a dispute. That is because filing the dispute will force the agency to prove that the debt is yours.
When entering a deal with a collection agency, ensure that the agreement is written and wait for their approval. Don’t give the collection agency your bank information. You should submit a paper check. The chances are that they may counter your offer.
Don’t be in haste to reach an agreement. Keep negotiating until you come to a favorable deal. Upon reaching an acceptable figure to both parties, you’ll pay the balance. You must have the agreement in writing so that you’ll have proof of breach of the contract if the negative item stays on your report.
Draft A Goodwill Letter
A letter of goodwill can also suffice as a tool for removing late payments from your credit report. Goodwill letters are effective in scenarios where you were behind submitting payments. Suppose your account is already on the collection; the right move would be to negotiate a pay-for-delete arrangement.
The purpose of the goodwill letter is to request that a creditor removes the late payment from your credit report. These letters do not usually guarantee that the creditor will remove the negative item. Even so, there is no harm in trying. Moreover, these letters allow you to plead your case.
Exercise honesty when drafting these letters. If your financial misfortunes result from a medical condition or job loss, be sure to add that information in your letter of goodwill. Don’t shy away from including reasons for the late payment. Such as problems with the loan payment system.
No matter the reason for your late payment, try to be as clear and concise as possible. Your letter of goodwill should show that the entry in the report does not portray your true personality.
While credit is usually easily accessible, it may cause you headaches, especially when debts start piling up and you don’t have a way of settling them.
Never expect to miraculously come out of your debt overnight, especially if you have accumulated a lot of it over the years. You have to be willing to go the extra mile to improve your credit score. It is not a guarantee that your credit situation will improve quickly, but you mustn’t give up when things don’t go your way.
Consider Hiring A Credit Report Professional
After trying all the avenues to rectify your credit report, and you still haven’t made any progress, seeking the services of a professional would be a viable option to take. You can also go this road if you are tied such that you can’t keep up with the back and forth correspondence from credit bureaus and creditors. Go for a trusted credit repair company with experience and a proven track record in the field.
While it’s possible to eliminate negative items from your credit report, you must be willing to exercise patience and have the zeal to try out every avenue to accomplish this feat.