8 Tips for How to Clean Up Credit Reports Quickly

Your credit report plays a large factor in your life. When you apply for a mortgage, car loan, or business loan, your credit is one of the first things lenders look at. It will determine how much money you can get approved for and what terms are in your contract.

A poor credit report can lead to high-interest rates, low loan amounts, or no loan at all. Unfortunately, having negative marks on our credit report isn’t always our fault. People make mistakes.

Fortunately, however, you can learn how to clean up credit reports to make these inaccurate marks go away (most of the time).

How to Clean Up Credit Reports

If you’ve been turned down for a loan or other financial opportunity because of an error in your credit report, it’s vital to correct the mistake as quickly as possible. Learning how to clean up credit reports is relatively simple, as long as you’re willing to do the work.

Here are our eight tips to get you started.

1. Get a Full Copy of Your Credit Report

First, to understand what’s holding you back, you should get a full copy of your credit report. Every person has three separate credit reports from each of the credit bureaus – Equifax, Experian, and TransUnion. You are legally entitled to obtain a free credit report from each of the three bureaus once a year.

You can access this information through annualcreditreport.com. However, you can also download the PDF version or opt for them to be mailed out to you.

2. Look for Errors

Once you have your credit reports in front of you (physically or digitally), you need to go through each one looking for red flags. There are a number of things that can be hurting your credit score, such as:

  • A high debt-to-income ratio
  • Maxed out credit cards or lines of credit
  • Late payments
  • Past due balances
  • Multiple loan applications in a certain time frame
  • Foreclosures
  • Bankruptcy

Write down everything that can be considered negative on your report, keeping an eye out for any errors. The credit bureaus and the reporting agencies/companies can make mistakes. Errors aren’t incredibly uncommon.

Common errors include:

  • Clerical errors by the informing company
  • Identity theft issues
  • Double submissions for the same account or loan applications
  • Payments sent to the wrong account
  • Debts belonging to an ex-spouse
  • Old credit discrepancies that are past seven years old

Once you find an error, you have two options – submit a dispute with the credit bureau or submit a dispute with the company or lender who reported the discrepancy. We recommend doing both.

3. File a Dispute With the Correct Credit Bureau

When you find an error when learning how to clean up credit reports, your next step is to notify the appropriate credit bureau. You need to send an official letter through certified mail with a request for a return receipt. The letter should include your name, address, and the items you want to be changed or removed, and why.

The mailing envelop should include your letter, copies of documentation backing up your dispute, and a copy of the credit report with the disputed items circled. From here, the credit bureau has 30 days to take action and investigate your claims. They will contact the company who filed the disputed information and tell them to conduct their own investigation.

Should the company find the error, they are bound to contact all three credit bureaus to inform them of their mistake so they can alter your credit report. If the reporting company insists they were accurate in their original information, your report is unlikely to change. You can, however, request that the dispute is filed within your credit report.

Learn more here about the common mistakes you should avoid while filing a dispute.

4. File a Dispute With the Company or Organization

You can also write an official letter to the company or organization that provided the inaccurate information. Once again, be sure to include your full name, address, and items that you dispute. Include copies of documents that support your claims and mail it via certified mail, requesting a return receipt.

Mail your letter to the address indicated for the company in the credit report. If you can’t find an address, contact the company and ask.

Regardless of whether or not the company finds your dispute to be valid, it must report your dispute to the credit bureau and inform them of their findings.

5. Consider a Pay for Delete Offer

Learning how to clean up credit reports means understanding that things won’t always go your way. If you find an error that cannot be disputed, you can offer to pay the creditor in full for the amount disputed. This is most common is past due accounts.

In return, they can remove their negative report with the credit bureaus.

6. Request a Goodwill Deletion

If the negative mark on your credit report was paid in full but at some point was late or past due, you don’t have the option of paying it off again. However, you can attempt to request a goodwill deletion through the creditor.

You can explain why you were negligent with your payment in the past and point out that you did pay it off in full. If you’ve continued to do business through them, you can point out your recent payment history to gain favor. Ultimately, it depends on who you talk to, how you approach them, and how forgiving they are.

7. Wait for the Time Limit

While figuring out how to clean up credit reports, there’s a chance you’ll come up empty and fail to get some negative marks removed. In this case, you may have to simply wait out the storm.

Credit bureaus try to stay as accurate as possible, which means most items will be removed after seven years, good or bad. You may be forced to wait until the item expires from your report. If there’s a seven-year-old or older negative mark in your report, you can request that it be removed.

8. Take Steps to Avoid Problems in the Future

Finally, it’s important to learn what steps to take in the future to avoid issues on your credit report. Think of it like running a race – it’s much easier to keep up than fall behind and catch up.

Think about your active payment methods, budget, and spending habits. Are you setting yourself up for success or failure?

Looking for More Financial Advice?

If you’re learning how to clean up credit reports, it may take a little time. However, you’ll be grateful you put in the effort in the future. There’s nothing worse than walking out of a bank with your tail between your legs because you failed to get approved for a much-needed loan.

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