One of the most effective ways to improve your credit score is to clean up your credit report of any derogatory, negative, and damaging bad credit items. This negative information is what’s bringing down your credit score.
According to FICO, your payment history is roughly 35% of your overall credit score, and by removing the negative items on your credit reports, you’ll be improving this piece of your credit score pie. Derogatory items include late payments, charge offs, judgments, debt collections, repossessions, liens, and more.
The most common way to clean your credit is to file a credit report dispute, directly with the three major credit bureaus, Equifax, Experian, and TransUnion. Filing a dispute is how you tell them, there’s a mistake on your credit report, that needs to be fixed, and removed.
You’re entitled to dispute any item on your credit report, that you believe is questionable or inaccurate. The Fair Credit Reporting Act (FCRA) gives you this right, just like you have the right to vote.
It’s important to note, you’ve got three separate credit reports, one report per credit bureau. Often, your credit reports will contain different information. This is important because you are going to file your dispute with a specific credit bureau.
For example, if you have a charge off on your Equifax credit report, then you’d have to file a dispute directly with the Equifax credit bureau. It’s often a false belief that when you dispute one credit bureau, you’re disputing all three credit bureaus.
With the same example and a charge off, if this item is also on your Experian, and TransUnion credit reports, then you’d have to file two additional disputes, for each of those credit reports and credit bureaus. In other words, you have to dispute each item, on each of your credit reports, with each of the three major credit bureaus.
The Brick Wall
Unfortunately, removing bad credit isn’t as simple as filing a credit dispute. The unavoidable truth is the credit bureaus are required to investigate consumer disputes according to the same law, the FCRA.
However, the credit bureaus get to first decide if your dispute is valid or invalid. And only if your dispute is deemed valid, does the credit bureau then conduct an investigation. Critics believe this is a stall tactic, used in hopes of frustrating consumers, and getting them to give up and just live with bad credit.
There’s a clear conflict of interest, with the credit bureaus being able to first deem your dispute valid or invalid. It costs the credit bureaus money, to conduct an investigation, and thus, there’s a clear financial incentive for them to avoid investigating consumer disputes.
You see, this money is otherwise profit. And if the credit bureaus were truly concerned with only having accurate information on your credit report, there would have been no need for Congress to pass the Fair Credit Reporting Act, way back in 1970, which requires the bureaus to investigate consumer disputes.
It’s wise to anticipate your dispute will be initially deemed invalid. You’ll have to jump thru some hoops and remain persistent. Avoid getting overwhelmed in this process, and try to stay organized. If you’d like some help with credit repair, you can get a free credit consultation by calling toll-free 1-877-418-7596.
Once the credit bureaus deem your dispute valid, then they’ll conduct an investigation. Where they’ll contact the original lender, creditor, or company that is reporting this negative information, and ask for verification of the account, the dates, the amount, and any other pertinent details.
If the credit bureau is unable to verify this item, then it must be removed from your credit report. And thus you’ll clean up credit report negatives, and in turn, this will improve your payment history and often results in credit score improvement.
Frequently bureau investigations result in the removal of bad credit items. If we use the earlier example of a charge off, when the credit bureaus investigate, they’ll contact the credit card company for verification, and because your debt account has been sold, there’s no financial incentive for the credit card company to verify your account. And thus, it’ll often be removed.
However if the credit bureau is able to verify your account then they’ll update the listing on your credit report, and it will continue to remain. It is key to clean up your credit reports, along with building credit to achieve a good, accurate, and representative credit score for your true credit worthiness.
Keep in mind the negative items are damaging and bringing down your credit score. Therefore we need to remove them, and better yet replace them with responsible positive payment history, and information. This is what builds good credit.
The last tip we want to share with you, to raise your credit score, is to show available unused credit. This will help your amounts owed, which according to FICO is roughly 30% of your credit score. This is accomplished with a credit card, for example with a credit limit of $1,000, and a monthly balance of about $300, resulting in $700 of unused, and available credit.
Naturally, if you do this, you’ll appear to be a better credit risk, than if your credit card, was maxed out. The key is to have available credit, don’t stress the details. By focusing on these two factors your amounts owed, and payment history, you’ll be targeting roughly 65% of your credit score, and the areas most directly under your control.
The other factors involved with your credit score include: how old your accounts are, and how long you’ve been using credit, along with the types of accounts, and how often you’re applying for new lines of credit. Obviously, the older the better, the more diverse your types of financing, the more secure you’ll appear, and you want to avoid appearing as if you’re looking to get financing for a new purchase, every weekend.
Please, take action to escape the confines of a bad credit score. Free yourself, and all that wasted money, embarrassment, and clean up your credit report, and get the credit score you truly deserve, it’s life changing.
We encourage our members to consider professional, legal, and legitimate credit repair companies to help. Because in just 2016 alone, over 9 million negative items were removed from consumer’s credit reports.
One of the best firms is The Credit Pros. They’ve helped client’s successfully remove late payments, collections, charge offs, judgements, liens, and many more derogatory credit report items.
Get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies on how to clean up your credit report, and earn the score you truly deserve with Dan Willis, sign up for our free newsletter and join our congregation.
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