Reviewing your credit report may have confirmed your fears. Although you can’t erase all of the incorrect information, there are some steps you can take to improve the situation.
1. Correct any errors on your report: It is common to find that there is incorrect information on your credit report. You have the legal right to dispute and correct this information, and you must do so. You may submit a dispute in writing to each credit reporting agency that has reported inaccurate information. By law, they must investigate the entry, correct any errors, and respond to you within 30 days. Then you should get another copy of your credit report to confirm the corrections. Then you must also submit the results of the investigation to the other credit reporting agencies.
2. Get help from your creditors: Filing a dispute with the credit reporting agency can remove unverified information about the debt, but not if the creditor insists you owe money and verifies that fact with the agency. Now, you have to convince your creditor that there is a mistake. Provide any proof you may have to your creditor. If it is insufficient, you may have to agree to pay some or all of the debt, immediately or in installments. If so, be sure to get written confirmation of the settlement and that the negative information will be removed. Find out if the creditor will contact the agency to make the correction, or if they simply won’t verify the information when the agency contacts you.
3. Eliminate student loan defaults: If student loan defaults are hurting your credit, take steps to eliminate them. If you qualify for certain loan discharges, then the fact that you were ever in default on a student loan may be removed from your record. You can also rehabilitate or consolidate a delinquent student loan so that it is no longer delinquent. For more information on resolving delinquent student loans, visit the National Consumer Law Center’s Student Loan Borrower Assistance Project at http://www.studentloanborrowerassistance.org. The US Department of Education also has some helpful resources online at http://www.ed.gov.
4. Clean public record information: The information on your public record can sometimes be the most damaging. This includes arrests, convictions, lawsuits, foreclosures, tax collections, and liens. The best way to remove such information is to start at the source: the government agency provides the information to the credit bureau. For example, you can reach an agreement with your creditor to remove a default judgment against you if you enter into a payment plan. The court will remove the default, you can dispute the information on your report, and the credit bureau will have to remove it.
5. Remove old information – Most of the incorrect information should be removed from your report after a certain number of years.
after 7 years
• Accounts sent for collection or cancelled.
• Trials and sentences.
• Paid Tax Links.
• Most criminal records.
after 10 years
• Bankruptcies.
Forever (can be reported indefinitely)
• Criminal convictions.
• Positive information.
6. Explain the harmful information: You can send a statement to the credit bureaus explaining the harmful elements. Now, they are not required to include the statement in their report, but they can agree to do so. For example, if you were sick and unable to work, and your creditor agreed to postpone your payments, then the office must include a statement as such. Keep your statements short. You can also explain your delinquency to your lender directly. Federal law requires creditors to at least consider your explanation.
7. Avoid overreacting to threats: Creditors may threaten to report negative information to the credit bureaus, but this is only intended to pressure you into paying. Actually, that information is reported automatically every month, no matter what. If the threat comes from a collection agency, the threat is even less likely to make a difference. That information is also automatic. Also, these threats are likely illegal under the Fair Debt Collection Practices Act. You can sue the collection agency under that statute. This law does not apply if a creditor himself is making the threats.
8. Avoid credit repair agencies: Avoid companies that promise to fix your credit report for a fee. These agencies usually cannot keep their promises. You can do a better job yourself by following the tips above and finding other resources to help you.
