How to Clean Up Your Credit Report
In order to get the loans you need and repair bad credit, clean up your credit report. Lenders make their decision to approve or deny loans based on your credit report and it is therefore imperitive that your credit report is correct and clean from any errors or mistakes.
To clean up your credit report, you'll have to get copies of your report from the three major credit bureaus, review them for any inaccuracies or out dated information, and then request the credit bureaus to correct the information.
Obtaining A Copy of Your Credit Report
- Credit Bureaus: You can order a free copy of your report from the three major credit reporting companies: Equifax, TransUnion, and Experian. Since they often contain different information, it is important to order your report from all three bureaus.
- Free Credit Reports: You can get one free credit report each year from each of the three major credit reporting companies. If you fulfil any of the following conditions, you can get an additional free copy of your credit report each year:
- you've been denied credit because of information in your credit report
- you're unemployed and looking for work
- you receive public assistance
- you believe your file contains errors due to fraud or identity theft
- you've been denied employment based in whole or in part on information contained in the report - Credit Reports for a Fee: If you do not qualify for a free credit report, you can get one by paying a fee of $10 or less, depending on your state requirements.
You will be asked for your name, address, Social Security number, and date of birth when applying for a credit report. If you moved in the last two years, you may also have to provide your previous address. You might also be required to confirm your identity - you may need to answer questions like the amount of your monthly mortgage payment, previous addresses or employers, and other information that only you would know.
For more details on how to obtain your credit report, read this credit report repair guide.
Incorrect Information In Your Credit Report
Once you get your credit report, be sure to go through it with a fine comb and list everything that's incorrect. Examples of incorrect information include:
- incorrect or incomplete personal information such as your name, address, phone number, birthdate, Social Security number, or employment information
- incorrect payment histories (late payments listed when you paid on time)
- any old closed accounts that are currently listed as open (too much open credit?)
- bankruptcies not identified by their specific chapter number
- any accounts that are not yours
- lawsuits in which you were not involved
Out of Date or Old Information In Your Credit Report
Old information that should not be present in your credit report includes:
- negative information that is more than 7 years old (lawsuits, judgments, paid tax liens, accounts sent to collection, criminal records - criminal convictionsmay be reported forever, late payments, overdue child support)
- bankruptcies reported more than 10 years after the date of the last activity
- credit inquiries that are more than 2 years old
Requesting Removal of Adverse Information
After carefuly reviewing your credit report, complete the form the credit bureau provided to dispute entries in your report. List each inaccurate or out-of-date entry and provide an explanation of what is wrong with the item.
Once the credit bureau receives your request, it must investigate the items you disputed and contact you within 30 days. You can speed up the process and request an urgent investigation if you let the bureau know that you're trying to get a home mortgage or car loan.
If the investigation shows that your claim is right about the inaccuracy of the information or if the creditor who provided the information cannot verify it any longer, the credit bureau must remove it or update the information in your report.
If the credit bureau maintains that the information you disputed is correct by their records, contact them directly. If that doesn't work, ask the creditor to tell the credit bureau to remove the information. If you feel a credit bureau is wrongfully including information in your report, or you want to explain a particular entry, you have the right to put a brief statement in your report.