How to clean up credit reports

The information on your credit report, from the types of accounts you have to your payment history, is used to determine your credit score. Negative or inaccurate information could lower your credit score and affect your ability to reach your personal and financial goals.

While not every inaccurate item will lead to a lower credit score, cleaning up their credit report can help some people increase their credit scores. To have a healthy credit file, dispute errors on your report and take steps to address any legitimate negative information.

Why should you clean up your credit report?

A clean credit report can open the door to better opportunities if unfair, inaccurate negative marks are keeping you from having a better credit score.

Better credit may help you financially in several areas:

• Better loan approval chances: The best credit cards are typically targeted to people with scores of 670 or higher.
• Increased job opportunities: Employers may check your credit as part of the hiring process. Bad credit may disqualify you from certain jobs, such as those involving finances or sensitive information.
• Lower insurance premiums: In most states, insurance companies can consider your credit-based insurance score. Negative marks lower your score, resulting in higher premiums, while a clean report can lead to lower premiums.
• Lower interest rates: Having good credit shows that you make payments on time, so lenders may choose to offer lower interest rates. A lower rate means it’s less expensive to borrow money.
• More favorable loan terms: Lenders may offer higher loan amounts, longer repayment periods and lower fees to people with good credit.
• More housing options: Landlords may check your credit to gauge how likely you are to pay your rent on time. Bad credit could limit your access to housing.

How to clean up a credit report fast

Cleaning up your credit report isn’t an instant process, but the sooner you start, the sooner any needed changes can take place. From start to finish, here are the steps to clean up your credit score as quickly as possible.

1. Get copies of all three of your credit reports

For a thorough clean-up job, you need to know exactly what information has been reported to all three bureaus. Request copies of your original reports directly from each bureau: Equifax, Experian and TransUnion.

You can get free copies of your credit reports at AnnualCreditReport.com, an official website operated by the three credit bureaus. You can access them up to once per week through the platform.

2. Study your reports for errors and derogatory marks

Credit reports can sometimes contain errors. Carefully review your credit reports and look for unfamiliar accounts or information that is incomplete or inaccurate.

Some examples of credit report errors include:

• Accounts that don’t belong to you.
• Errors in credit limits or account balances.
• Incorrect reporting of late payments or missed payments.
• Mistakes in your personal details.
• Multiple listings of the same account.
• Old negative items that should have fallen off your report.

Note that not every kind of error leads to a lower score. For example, an incorrect middle initial or workplace isn’t going to affect your credit score. It’s also possible for errors to be giving you a higher score, such as an account you don’t own that’s in good standing and puts you in a better debt-to-income ratio.

Credit reports can also contain accurate information that reflects poorly on you as a borrower. Derogatory marks might look like:

• Accounts that have been turned over to a collection agency.
• Accounts that the lender has written off as “uncollectible.”
• Bankruptcy filings.
• Foreclosures or repossessions.
• Payments that were made 30-plus days late.

Credit report errors and legitimate derogatory marks must be handled separately. Note each error and derogatory mark, along with the bureau(s) reporting them.

3. Dispute errors with each credit bureau or lender

The third step to clean up your credit is to dispute all of the errors you found. You’ll usually need to file a dispute with each bureau reporting the incorrect information. You can do this by mail, online or over the phone.

Credit bureaus must investigate disputes within 30 days and notify you of the results within five business days of resolution. However, if you provide more information during the investigation period, the process can be extended by up to 15 days.

How to file a dispute by mail

To file a dispute by mail, submit a detailed letter to the appropriate bureau(s). The Federal Trade Commission provides a sample letter you can use as a template. Your letter should identify the accounts you’re disputing and explain why the information is inaccurate or incomplete. Include any documentation that supports your dispute, such as bank statements.

The credit bureaus also offer dispute forms that you can print and fill out:

• Equifax dispute form
• Experian dispute form
• TransUnion dispute form

Once you’ve written your letter or filled out the bureau’s dispute form, send it to the relevant bureaus by certified mail.

Equifax Information Services, LLC
P.O. Box 740256
Atlanta, GA  30374-0256

Experian
P.O. Box 4500
Allen, TX 75013

TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000

How to file a dispute online

Each of the credit bureaus allows consumers to file disputes online. Once you’ve submitted a dispute, you can follow its status online. To get started, use the online submission form on the relevant credit bureau’s website:

• Equifax online disputes
• Experian online disputes
• TransUnion online disputes

How to file a dispute by phone

The credit bureaus also accept disputes and follow-ups by phone. Here are the phone numbers for the bureaus:

• Equifax: 1-888-Equifax (1-888-378-4329)
• Experian: 1-888-Experian (1-888-397-3742)
• TransUnion: 1-800-916-8800

When to file a dispute with the lender or creditor

It’s not just the credit bureau’s responsibility to ensure the accuracy and completeness of your credit report. It’s also the duty of the businesses that provide your information to the credit bureau. The Federal Trade Commission recommends asking the credit bureau and the lender that reported the incorrect information to correct their records.

If you need to file a dispute with a lender or creditor, contact the business directly. The company’s contact information should be on your monthly billing statement.

4. Address derogatory marks to the best of your ability

After correcting the errors on your credit report, it’s time to address any accurate negative information. In some cases, it’s possible to remove negative information or reduce its impact on your credit. Here are some methods that might help you clean up your report:

• Negotiate a settlement: You can try to settle debts for less than the full amount owed to get the accounts closed. Note that this can be expensive and have long-term consequences for your credit score, making some experts recommend bankruptcy over this option.
• Pay the debt. If you can, your best option is to pay anything you owe.
• Seek professional assistance: Consider hiring a credit repair company to help you clean up your report.
• Validate your debt: Verify debts with collection agencies to evade zombie debt.
• Write a goodwill letter: Ask the creditor to remove a negative mark as a one-time courtesy.

Credit report clean-up services

You don’t need to clean up your credit report on your own. Credit counseling agencies, specialized attorneys and credit repair companies can help you understand your credit report and get it cleaned up. They can do most, if not all, of the hands-on work for a fee.

Credit report clean-up services can include credit counseling, error disputes, debt negotiation and personalized advice about improving your credit score. To find the best credit repair agencies and clean-up services, look at recommendations from trustworthy resources like:

• Financial Counseling Association of America
• National Foundation for Credit Counseling
• The nearest consumer protection office
• U.S. Department of Justice
• Your state’s Attorney General office

The bottom line

Having a clean credit report can help you reach your financial goals, whether that’s qualifying for a premium credit card or getting approved for a car loan. Take steps to fix the errors on your credit report and resolve any legitimate negative marks.

Frequently asked questions

• Can your credit report be wiped clean?

  It’s not possible to wipe your credit history clean. Negative items like late payments, collections and bankruptcies typically remain on your credit report for several years. However, you can rebuild your credit with on-time payments, debt reduction and responsible credit account management.
  

• How long does it take to clean up your credit report?

  Every credit report is different, so the time it takes to clean up your report will vary depending on the information that’s been reported. If you only have one or two errors, you can expect the process to be fairly quick. However, if you’ve been a victim of identity theft and have many accounts to dispute, the process may take more time and patience.
  

• Is your credit clear after seven years?

  While most negative information falls off your credit report after seven years, it doesn’t mean your credit is automatically clear. Some items, like bankruptcies, can remain for up to 10 years. Plus, the impact of certain negative marks can linger even after seven years.