In this article we review the 4 steps to erase bad credit on your credit report. You don’t just have to live with bad credit for 7 long years!
1. Get All 3 Of Your Credit Reports
The very first step is to get a copy of your credit report from each of the 3 major credit bureaus. This includes: Experian, Equifax, and TransUnion.
It is common for the information contained on each of these 3 credit reports to be different. This is a result of some lenders not reporting your account to all 3 of the credit bureaus. Instead, a lender may only report your account to 1 of the 3 credit bureaus.
2. Review Your Credit Reports In Detail
The next step is to review each of your 3 credit reports in detail. You need to look for items that you believe are incorrect, inaccurate, or questionable. Research shows that 79% of all credit reports contain an error.
This error could be damaging your credit score. The Fair Credit Reporting Act, a federal law, says you can dispute any item. And potentially remove it from your credit report that you believe is incorrect.
3. Negative Items
The negative items on your credit report such as charge offs, late payments, repossessions, collection accounts, etc. Are the items that are damaging and bringing down your credit score.
Getting good credit is a two-step process which is part working to remove bad credit and building good credit to replace it.
4. Dispute Your Credit Report
You can file a dispute with the credit bureaus to have items investigated. This can delete incorrect information from your credit report. This is your way of saying to the credit bureaus:
“Hey there is a mistake on my credit report, will you please remove it.”
You can do this by creating a credit bureau dispute letter. You should mail this letter to the credit bureaus using certified mail. You can also file a dispute online and over the phone.
If you choose to dispute credit information using a dispute letter. You will have evidence that you filed a dispute.
And you can provide supporting documentation with your letter. Once the credit bureau gets your dispute. They are required by the Fair Credit Reporting Act to investigate the item.
During a credit bureau investigation the lender or creditor will be contacted and asked to verify your account. Verification of your account information includes: the dates of last activity, and the total amount due.
If your account is not verified. Then federal law requires the credit bureaus to remove it from your credit report. If the credit bureaus do verify your account.
Then it will remain on your credit report. The information may be updated. If your account is verified. You can still work to remove this item.
You will frequently need work directly with the lender or creditor for removal. You may need to make a settlement payment. In exchange, for removal of bad credit from your credit report.
You will receive notification of the credit bureaus investigation results. If they item was removed or verified. This will be an indication of how you should move forward to clean up credit report information.