How to Wipe Your Credit Clean
A negative credit rating prevents you from obtaining housing, a car loan and possibly a job, but you can wipe your credit clean to avoid these circumstances. The practice known as "pay for delete" allows consumers to pay collection agencies a lump sum to delete delinquent accounts, unpaid balances and charged-off accounts from their credit rating. Each collection agency sets its own guidelines regarding the process, but the Fair Debt Collection Practices Act does not prohibit the practice.
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Instructions
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Order a copy of your credit report from all three major credit bureaus (Equifax, Experian and TransUnion -- see Resources). Highlight each negative entry you want to remove and record these entries and the creditors' contact information on a separate list. Credit Repair suggests employing the pay-for-delete strategy only for accounts that have gone to collections or have been charged off. Understand that some negative marks such as bankruptcies or legal judgments aren't removable.
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Call each creditor or contact them by mail and request a pay-for-delete agreement. Only request a pay-for-delete if you can offer to pay the full amount or a sizable percentage of the outstanding balance. Set a deadline by which the creditor must remove the entry from your report to ensure the creditor upholds his end of the deal.
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Wait for the creditor's response; if he offers an agreement, promptly send a money order for the settlement. It's best to use a money order instead of a personal check to avoid exposing your bank account information. Along with your payment, request a signed and written copy of the agreement, even if you contact the creditor by phone. If a creditor fails to uphold his end of the deal, a signed copy of the agreement provides leverage for legal recourse.
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Monitor your credit rating to ensure the creditor upholds your agreement. Some creditors will delete negative entries right away, while some may take as many as 30 days. However, make sure the creditor removes the entry by the deadline you agreed upon.
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Tips & Warnings
If negative entries on your credit report are not yours or appear inaccurate, you can dispute the entries as inaccurate with the major credit bureaus to have them removed.
Sign up for new credit accounts and pay all of your bills on time. Removing negative entries will remove the damage on your credit report, but properly managing your finances will help you improve your credit rating once it's wiped clean.
Avoid credit repair companies that promise to wipe credit clean in exchange for a fee. You can wipe your credit clean yourself without the aid of credit repair companies. While some of these companies are legitimate, if a company requires that you pay upfront or suggests seemingly illegal activities, this is a sure sign that you could be a potential scam victim.
