How to Clean up a Credit Report: File a Dispute, Goodwill Letter, and Other Ways to Clean It Up
Each of us understands the role a credit report plays in our lives. It can help or hinder your future credit card acquisition. So, take the time to check and clean up your credit report. This way, you can increase your rankings and save money. Why would anyone want to know your credit history? Let’s imagine the situation. You want to rent an apartment, and you need to convince the owner that you are a decent person and that all payments would be made on time. This is where the report can come to the rescue. At the same time, if you don’t clean up bad credit, it can lower your chances of renting an apartment. Unfortunately, for many Americans, this report spoils their credit reputation because of errors in filling out. However, there are some ways to clean up credit reports: you can correct all mistakes and even pay off debts in order to become financially reliable. What do you need to do?
- You need to request your credit reports from three major bureaus (TransUnion, Experian, and Equifax).
- Study the reports carefully to be sure that all transactions were performed by you and their amounts are correct.
- If you find any inaccuracies, dispute them online or by mail.
- Clean up your credit history.
- Be sure to develop a debt settlement plan, if you have any.
However, let’s take a closer look at this topic, and find out how to clean up a credit report. We will be happy to help you improve your credit rating.
How to Get Closed Accounts off Credit Report?
Potentially negative closed items on a credit report can help to increase your rating. However, if it is a positive closed credit. it is better not to remove it. Look at the situation that happened with one guy. Ruby paid off his student loan, and the credit bureau closed his account. Also, the bureau removed it from history. At first, the man was glad that now there would be fewer closed debts in his report. However, it turned out that his rating dropped. Why did it happen? Too short credit history makes him a risky client in banks. Therefore, when you Google “closed account on credit report remove”, to apply the information obtained in practice, remember that you do not need to delete all closed accounts. You can get off them by several steps:
- Without a successful challenge, you will not be able to update or delete a closed account. When submitting your request, please provide the following information:
- your name;
- account data;
- describe the reason for the dispute;
- documentary evidence.
Within 30 days, the Bureau must review your request and inform you of the results of the investigation in writing form. If according to the law, the disputed information needs to be deleted, the bureau would do so. However, if the information on the results of the check is correct and you just want to delete only based on negative activity, then you should move on to the next step.
- You can write a letter and ask to remove a closed account from the credit report. The main difference between a letter and a dispute is that you do not challenge the accuracy of the information. Lenders can deny your request. However, if you did not make payments on the loan on time due to circumstances beyond your control (illness, injury), then this is an extenuating circumstance. When you pay in full or are calculated less than the full amount, you may be asked for an additional payment. However, this is problematic because even if the receiving account is deleted, the original account with the history of the retreat will remain. Let us give you an example to make things a little clearer. Let’s say your credit card has expired, but you haven’t paid off your debt for about a year. The bank can then turn over your record to the debt collector. And it is with them, you would decide the issue of deleting your account. However, in the successful solution of this situation, only the debt collector’s account would be removed. And the bank would keep the original record for each month you did not pay.
- The last step on getting closed accounts off credit report is the hardest – waiting. If you did not make concessions, then you would have to wait 7 years for your account to be deleted. This date is calculated from the moment of the first message about your loan, so in fact, it would take less than 7 years.
How to Remove a Negative Item from a Credit Report?
Only invalid elements can be deleted. If you have done this, but your place in the rankings has not changed, you will need to fix bad credit over time. Or perhaps you have not fixed all the errors in the report. Let’s find out more about removing negative credit.
File a Dispute
The procedure of filling a dispute is the same as described in the previous section of our article. However, it concerns disputes to the bureau. Also, you can file a direct dispute with the reporting business. They are required by law to investigate and give a written response. If the dispute is successfully resolved in your favor, then you should make sure that the records are deleted absolutely everywhere. Many people worry that if a dispute is initiated, the storage period would be renewed. However, it is not. Therefore, you should not worry about this, and all bureaus would remove negative items on a credit report after 7 years.
Pay for Delete
You can offer full or partial payment of the debt, and the creditor would remove a negative item on a credit report in return. However, this option has positive and negative sides. Lenders often agree to such an offer, as their goal is to get the money back. But this provision is not fixed in the legal framework. Therefore, the request may be rejected or not deleted in all financial institutions.
Writing a goodwill letter is one of the possible alternatives. However, you can get a positive answer only if you have fulfilled all the conditions of the lender. Again, no one is obliged to give a positive answer to your letter. However, this strategy is successful in the case of one missed loan payment.
You have probably noticed that these steps to remove negative items from a credit report are similar to the steps of the previous section. But further information would surprise you.
Credit Repair Service or Counseling Agency
You don’t have to deal with the problems yourself. You can hire a dedicated agency to help you remove negative items from a credit. Basically, they would go through all the steps above for you. The advantage of using such services is that they have more experience, so the chance of success is higher.
What Strategies Should You Avoid?
The bankruptcy process doesn’t have to be a tool for cleaning up your credit history. Because this would not improve the situation, it would only make it worse. In addition, the record would be in the report for about 7-10 years.
How to Write a Letter to Remove a Negative Credit?
When you sit down to write a letter, imagine that you are reading such a letter. Would you be outraged by ridiculous excuses or accusations? Most probably not. Therefore, the writing style must be respectful in order for the lender to want to help you. Explain the reason for the late payment honestly, because it can endear the lender. However, you don’t have to make excuses, just admit your mistake. You should also not use in a clean credit letter the expressions like “it would be nice if you removed …”. You need to directly ask for deletion. The letter doesn’t have to be too long and tell the whole story of your difficult life. Therefore, respect the reader and keep it short. If you can state the essence of the problem in several sentences in any form, then here are the details that must be included:
- date of writing the letter;
- your contact details (name, phone number, address);
- lender’s contact details;
- account number and what you want to delete;
- which credit bureaus should remove items.
By the way, a letter to remove credit inquiry is the best option for such cases. However, what about derogatory credit? First of all, you need to file a dispute, and only after that write a letter to remove derogatory credit.
We believe that deleting negative records is a feasible task. In any case, it is worth trying to raise your rating. After all, the higher it is, the more privileges you have. If you still have any questions, ask us in the comments. We would be happy to help you. Thank you for reading the article to the end. See you soon!
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