How to clean up your credit
Dear Debt Adviser,
How do you remove information that is
inaccurate and false from your credit report? How do you clean up
several negative reportings?
I have good news and I have bad news.
The good news first: The Fair Credit Reporting Act
outlines an established procedure for disputing incorrect or inaccurate
information on a credit report.
The first thing you need to do is request
a copy of your credit report from each of the three major reporting
agencies: Equifax, Experian and TransUnion. A small fee may be charged
depending on the state in which you reside. If you have been refused
credit or turned down for housing or insurance in the last 60 days,
you may qualify for a free copy of your report.
After you receive your credit reports follow these
- Contact the credit reporting agency that issued
the report and dispute the incorrect or inaccurate information.
You may dispute an item by phone, mail or online.
- You will need to provide your Social Security
number, date of birth, current address, company name of the disputed
item (found on your credit report), account number of the disputed
item and reason for your dispute. Examples of reasons for a dispute
include: the item does not belong to you; current balance is not
correct; the account is closed or the account has been paid off.
- The Fair Credit Reporting Act provides that the
agency must investigate the disputed item(s) and correct or delete
the inaccurate information (usually within 30 days). The agency
is required to give you a written report of the investigation
and a copy of your report if the investigation resulted in any
- You can also report disputed credit report items
directly to the creditor. As a result of your dispute, the creditor
can not report the information to an agency without including
a notice of your dispute. Once you have notified the creditor
of the error in writing, it may not continue to report the information
until the situation has been researched.
Now for the bad news.
A credit reporting agency keeps reporting all accurate
negative items for seven years, 10 years for Chapter 7 bankruptcies.
But all is not lost. There are some things you can do that will
make a negative item appear a little less negative by raising its
- Pay off any old debts that are reported as write-offs
by the creditor. The debt will still appear as a write-off on
your report, but it will also show that the balance was paid in
- You may submit, to each of the credit reporting
agencies, up to a 100-word written statement that must be added
to your credit report explaining a negative item. You may want
to include the circumstances under which you defaulted on the
loan such as job loss, illness or any other extenuating circumstance
in the statement.
It is a good idea to check your credit report once
a year to avoid any unwanted surprises at the car dealership or
mortgage loan officer's desk. Any incorrect information should be
disputed right away. Just as important, make sure the car note you
finally paid off and the personal loan you paid off early are included
on your report. You want all accurate information to be reported.
Remember, although not just anybody can request a
copy of your credit report, employers, apartment leasing offices,
insurance brokers and others with a need recognized by the Fair
Credit Reporting Act can access your report. It is, therefore, more
than worth your while to make sure your credit file accurately represents
your credit worthiness.
The Debt Adviser, Steve Bucci,
is the president of Consumer Credit Counseling Service of Southern
New England. Visit CCCS
for additional debt
advice or click
here to ask a debt question.
-- Posted: Aug. 23, 2002