How to Clean My Credit History

You can clean up your credit and improve your score.

If you do not carefully monitor your credit history, incidents such as forgotten payments or a medical bill you were not aware of can cause your credit score to drop. When your credit file is pulled by a lender and you get turned down for a loan or are quoted an interest rate far higher than you had hoped for, you can be pretty certain that your credit history is to blame. If you know that the negative information your credit file contains is accurate, claiming otherwise in the hopes of having the notations removed constitutes fraud. You do, however, have the option of disputing not what is reported but the way in which it is reported.

Instructions

1. Check all three of your credit reports to find out exactly what you have to work with. Make sure that you pull formal credit reports directly from the credit bureaus since free or tri-bureau credit reports give you only generalized information. You need your actual credit reports to begin successful credit repair.

2. Verify that the reporting period has not expired on any negative items currently being reported. The reporting period for negative items contained within a credit report is set by the Fair Credit Reporting Act (FCRA). Unless an item appears in the "Public Records" section of your report, it must be removed after seven years. The credit bureaus do not always remove items after the reporting period expires, so it is vital that you monitor the age of any negative entries on your report. If you find negative entries for which the original debt is older that seven years, you are within your rights to petition for the removal of those notations.

3. Review your credit report for negative entries that you genuinely do not recognize. Send a copy of your credit report, along with a request for an investigation into the items, to the credit bureau reporting them. The FCRA gives the credit bureaus 30 days to investigate each disputed item. If the items cannot be validated, the credit bureau will remove them.

4. Write a "goodwill letter" to any lenders who are reporting past-due payments. Your payments history accounts for a larger percentage of your credit score than any other single factor. If you cite the fact that you are a good customer and ask nicely for the company to remove the late payment notations, it will often comply with your request.

5. Contact any collection agencies that are reporting negative information on your credit report. Offer to pay or settle the debt in return for the full removal of the negative information from your credit file. This tactic works best if you call near the end of the month when debt collectors are trying to meet their quotas. Remember to get all agreements in writing.

6. Scrutinize any negative entries that remain. Each entry must contain valid and complete contact information for the creditor reporting it and a date of last activity. A date of last activity, or DOLA, is the date the account first went delinquent. This is the date that sets the reporting period for when you can expect to see the negative entry removed. If any required information is either inaccurate or missing from any entry on your credit file, you have the right to petition for the removal of the entry. Only your formal credit reports from the credit bureaus will contain these details.

References

• Fair Credit Reporting Act (section 605)
• What's In Your FICO Score?