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How to Get Items Removed From Your Credit Report

Money logo Money 1/13/2020
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Your credit report is a signal of financial stability. But it’s fairly common even for the most diligent with their money to get slightly off track — and that’s where strategies to rebuild your credit come in.

Learning the ins and outs of credit reporting can be confusing if you don’t know where to look. The first step is to obtain and regularly review your credit report. The second step is to become empowered with the actions you can take to remove certain negative marks and improve your score. Read on to know what you can do, and when it might make sense to enlist the help of a professional credit repair service.

Why Is a Healthy Credit Report Important?

Whether you worry about your credit report or not, businesses consistently check your credit report to determine how risky it would be to lend money to you. Your credit health can weigh heavily into decisions about what interest rates you are offered on mortgages, car loans, and insurance premiums.

What does this mean? You pay more in interest, fees and premiums if you have a lower credit score because you’re seen as more riskier to take on. Being cavalier with your credit could mean less money in your pocket over time because you are paying out more in interest.

You can — and should — regularly review your credit report for accuracy. You should dispute any inaccuracies on your credit report and get them corrected. Errors can certainly happen, but these errors can affect your credit access or cost you important and necessary loan opportunities if they go undetected.

What Negatively Impacts your Credit Score?

The following behaviors can ding your credit score and cause trouble in your financial life:

  • Late Payments or Nonpayment: Payment history accounts for a large chunk of your credit score, so if you are chronically late or not paying at all, it will hurt your score significantly. According to Equifax, a single late payment that is overdue by 30 days can cause a 90-110 point drop in some cases.
  • Having a charge-off: A charge-off happens when a creditor has given up on you ever paying your debt and they “charge off” your account. This is bad news for your credit and could cause a credit score drop of 100 points or more in some cases.
  • Bankruptcy: Bankruptcy is an extreme measure and will hurt your credit score to the tune of up to 200 points or more. It also stays on your record for seven to ten years.
  • Foreclosure: A foreclosure is another red mark on your credit that can cause a credit score to drop substantially. FICO reports that a credit score can see up to a 100 point credit score drop from a foreclosure, depending upon the consumer’s starting score. Foreclosures can stay on your credit report for up to seven years.
  • Repossessions: If your car is repossessed, the credit bureaus may include a note about the repossession in your credit reports for up to seven years. A repo can include many of the negative line items you see here, so the score drop can easily go over 100 points.
  • Judgments: A judgment comes when a court is forced to get involved to ensure debt repayment. Credit score impacts can vary but the drop could also be over 100 points.
  • Collections: A collection occurs when a creditor resorts to hiring an outside firm to collect the payment. Collections fall under payment history, so the hit to your credit score can also be over 100 points.

Identity Theft and Credit Reports

Identity theft occurs when someone steals your personal information and uses it without permission. This can wreak havoc with your credit. The internet makes your personal information much more attainable to those who may want to take advantage of you. There are several ways this can happen including:

  • Credit card theft
  • Browsing an unsecured website
  • Malicious software
  • Mail Theft
  • Phishing scams through email
  • Credit card skimming

Identity theft can result in immediate financial loss, credit damage and anxiety. It can also take anywhere from less than a day to several months or even years to resolve. While you can’t completely eliminate the risk of identity theft, you can take precautions to be safer with your personal data. Monitoring your credit report can help you to stay on top of fraudulent charges.

If anything on your report looks suspicious, contact the creditor immediately to report the issue. You may be able to lock or freeze your account temporarily. Some credit card companies do this automatically when they spot too many charges at one time or charges that are out of the norm. You can also lock or freeze your credit if you fear you might be a victim of fraud or identity theft. Setting up a fraud alert can also be very helpful by alerting lenders that your credit might be at risk.

What are the Three Companies That Provide Credit Reports?

Equifax: Though this company made headlines in 2017 for a massive data breach, it remains one of the top 3 services to get your credit report. The company provides a few different levels of service if you want to monitor your credit score monthly (as opposed to getting a free, yearly report). The $15.95 per-month service boasts a report that looks at positive and negative factors effecting your credit score; the $19.95 per month option includes, ironically, a host of identity-theft protections.

Experian: You can use Experian for 30 days for free, before it starts to charge you $19.99 a month. With that fee, you get identity-theft protections, fraud-resolution services, and monitoring of your credit score at the big three companies.

TransUnion: For $24.95 a month, TransUnion will monitor all your credit score from all three big companies in real time; alert you if someone applies for something using your name; and features personalized debt coaching services.

Why Is It Important to Clear Negative Items From Your Credit Report?

Removing negative information can help you increase your credit score. Improving your credit score is crucial to getting loan and credit card approval with better interest rates on the accounts that you’re approved for.

6 Ways To Clear Negative Items From Your Credit Report

If you are working to get negative items removed from your credit report, you might not know where to start. Doing nothing can certainly harm your financial health; check out these strategies to help clean up that troublesome credit report.

Hire A Professional Credit Repair Service

When looking at the lifetime cost of bad credit, paying $100 a month for a reputable company like Credit Saint to help repair your credit is often a no-brainer. Credit repair services can help you with the following items:

  • Cleaning up credit report errors
  • Disputing negative entries
  • Creditor negotiations

Keep in mind that these actions are ones you can handle on your own. However, if your credit repair is complicated, credit repair services might be right for you.

Dispute With The Credit Bureau

The Fair Credit Reporting Act (FCRA) requires creditors to report accurate information about each account, so if any entries are incorrect on your credit report, bureaus are required to investigate and make the appropriate corrections. It is important to note that you will need to dispute the entry with each of the credit bureaus to make sure the removal is complete across the board.

Dispute Directly With the Reporting Business

If you decide to dispute a credit report entry directly with a business, which includes credit card issuers and banks, the business is also required to investigate and respond. If the reporting business corrects the issue, you might just save yourself a step. It is important to make sure the items are cleaned up for all three credit bureaus mentioned above.

Pay For Delete

Information that is accurate cannot be disputed the way that discrepancies can. In a pay-for-delete letter, you offer to pay the debt in exchange for deletion. You can also offer a settlement in exchange for outstanding debt on your credit report. The end game for creditors is getting as much of their money back as they can, so a commitment for payback can be enough of an incentive for a creditor or collection agency to remove the negative entry from your credit report.

Write a Goodwill Letter

It may seem like a long shot, but you can write a letter to the creditor and ask for a “Goodwill Deletion.” If you have taken appropriate steps to pay down your debts and have become a more responsible borrower, you might be able to convince the creditor to remove your mistake. There is no guarantee that your plea will get a response, but it does get results for some. This strategy is most successful for one-off problems, such as a single missing payment.

Wait it out

It may seem like waiting for a negative item to fall off your credit report is not a real strategy, but it’s a valid plan for some entries. Rebuilding your credit takes time; there is no quick fix for some things. The amount of time these items stick around on your credit report can vary. Negative items can linger for a long time, but their impact on your credit score lessens as time passes. While you wait, you can work on establishing good credit payment practices.

What Doesn’t Work?

There are credit repair strategies that work and some that don’t. Avoid the following if you want to improve your credit:

  • Filing for bankruptcy: Your goal is to eliminate bad debt and improve your credit score. Filing bankruptcy may eliminate your current debt but will fry your credit score. It will also linger on your credit report for seven years. Bankruptcy should be a last resort.
  • Closing a line of credit that is already behind on payments. This does nothing to remove the debt and actually can serve to work against you since your credit to debt ratio does come into play in your credit score calculation.

How to Get a Free Copy of Your Credit Report

You are entitled to a free annual credit report from each of the three main reporting bureaus: Equifax, Experian, and TransUnion. You can obtain a copy of your free credit report in one of the following ways:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

Bottom Line

There isn’t a 100% foolproof way to get an excellent credit score, because of the various puzzle pieces that go into composing the score. Even if you do find a great credit ratio that is working for you, other items can appear on your credit report that can impact your overall lendability. Regularly reviewing your credit report is the best defense you have for protecting your credit.

If you do find yourself in a situation where you need to have negative items removed from your credit report due to incorrect information or bad debt, it’s certainly possible to do. But the process can require patience, and you must be open to pursuing all the available methods. If you don’t, you might run into issues getting credit cards, loans, insurance and certainly the best rates for each.

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