How to remove bad credit from your credit report

Law bookThe Fair Credit Reporting Act (FCRA) enables the consumer to challenge and delete any information on his or her credit report for "completeness and accuracy." Anytime a consumer files a dispute, the credit agencies are required by law to contact the creditor and confirm that the information is verifiable, accurate, and not outdated. In some scenarios, the credit bureau must exceed a simple verification of the creditor's record. If the credit bureau has not received verification from the creditor within 30 days, then, the credit bureau is required to promptly remove the disputed credit listing.

It is your right and responsibility to assure the accuracy of the items on your credit reports. If information recorded on your credit reports does not accurately represent your behavior as a consumer, then you have the right to request that questionable information be removed from your reports. The Fair Credit Reporting Act (FCRA), Fair Credit Billing Act (FCBA) and the Fair Debt Collections Practices Act (FDCPA) afford you the legal right to dispute inaccurate items on your credit reports with the credit bureaus and your individual creditors.

The most popular method for restoring bad credit is the credit bureau dispute. Because of the Fair Credit Reporting Act, you have the right to dispute and delete any items on your credit report that you feel are inaccurate, untimely, misleading, biased, incomplete or unverified. When you dispute a questionable negative credit item with the credit bureaus, you are demanding that they perform an investigation to determine whether or not the item should be listed on your credit reports. If the credit bureau cannot verify the accuracy of the item, then they are required to correct the listing or completely delete it from your credit report.

Another facet of credit repair is to work with your creditors to remove the negative items from your credit reports. Your creditors have the ability to delete negative items from your credit reports at any time. With more cooperative creditors, sometimes all it takes is to ask the creditor to adjust or delete a negative credit listing. In situations where this non-confrontational approach is not sufficient, the various consumer protection acts provide you with tools for forcing creditors and collections agencies to prove the accuracy of the reported accounts. By using some or all of their legal rights to fair and accurate credit reporting, thousands of people have legally and successfully restored their credit and improved their credit score. SOURCE: Lexington Law

A recent settlement between the State of New York and the three largest credit bureaus will give consumers a grace period of six months before medical debts appear on a consumer's credit report. The credit agencies will be required to remove a medical debt/collection once it is reported as paid or settled.

The first step in removing bad credit is to obtain a copy of your credit report. Everyone is entitled to a free credit report from Equifax, Experian, and TransUnion at your request, once every 12 months. Unfortunately, the credit agencies are not required to provide you with your credit score. The agencies will provide you with your credit score for a fee.

After obtaining your credit reports. Carefully compare the credit reports. It is possible that bad credit is reported on one report and not on another. If you believe that the bad credit is in error, dispute it with the credit agency.

How old is the bad credit?

The time period is seven years for delinquent and unpaid credit accounts. Chapter 7 bankruptcies take 10 years to fall of a credit report. Unfortunately, seven or ten year time period is not always observed because collection companies buy and sell delinquent accounts. The start date for the seven-year credit report clock is the date of delinquency with the original creditor.

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Many creditors want to continue to do business with you, and may remove derogatory credit listings in order to continue that relationship. The industry term is "goodwill adjustment". It can’t hurt to ask the creditor to remove the late payment.

Be careful with charge off accounts

You might be tempted to payoff a charge off to improve your credit score, however, if the debt is paid off, the account will be updated and consequently, the seven year clock on the debt may start all over again. The only exception would be if you could get the creditor to agree in writing to remove the delinquency from your credit report.