Dealing With Negative Credit Report Information
Negative information doesn’t stay on your credit reports forever. Thanks to the Fair Credit Reporting Act (FCRA) most negative information must be removed from your reports after seven years, and hard inquiries are removed after just two.
But for someone who wants to improve their credit scores, waiting for years can seem impossible and even unrealistic. Fortunately, it’s not the only option you have. Instead of simply waiting and hoping for your scores to improve, you can take these steps to speed things up.
Four tips for dealing with negative credit report information
1. Check your credit reports
To get the full picture of what’s happening with your credit, you’ll need to take a look at your credit reports. By reviewing your reports on your own or with an NFCC-certified credit counselor, you can pinpoint the errors and past mistakes that need to be addressed.
There are lots of websites that offer “free” credit reports, but these sites usually charge hidden fees or they show you credit summaries instead of full reports.
To get your full credit reports for free from all three of the credit bureaus (Equifax, Experian and TransUnion) the only place to go is AnnualCreditReport.com. This service is provided through federal law and you can use it to pull your free reports as often as once a week.
2. Verify the details
Sometimes credit reports have inaccurate, outdated or blatantly incorrect information. In some cases, these errors can damage your credit scores. For example, if a report shows you missed a payment but you actually paid it on time, or if it incorrectly shows that you applied for credit cards and loans.
In order to improve your credit scores, you’ll need to identify these errors and prepare to file a dispute (more on this below).
In other cases, the information on your reports is negative but correct. For these items, there’s usually not much you can do but wait for the information to be removed. However, if an unpaid debt is making it difficult for you to qualify for a mortgage or if you’re facing a lawsuit over the bill, action could be needed.
If you have a collection debt that’s due to stay on your credit reports for several more years, and you can afford to pay it off, the best solution may be to carefully negotiate a lump-sum settlement with the debt collector. Just know that this may not result in an improvement to your scores.
In any instance, verifying the details is important and will help you determine how to proceed.
3. Ask for errors to be removed
When you find incorrect information, you have to contact the creditor and the credit bureau to fix the problem permanently.
To get to the bottom of the issue quickly, look to see if you have any records that prove there’s an error, such as receipts, an email from the creditor or otherwise.
Once you gather the information, contact the creditor and ask them to correct their error. Be prepared to send them your documentation if needed.
Then, file your dispute with the credit bureau. This process is free, and can be completed online in as little as a few minutes. You can visit these sites to file your dispute:
Once errors are removed, you may notice that you have higher credit scores. However, the impact will depend on the error. More recent and more severe errors, such as incorrect records of missed payments, will have the biggest impact when removed.
4. Add positive information
When there’s negative but accurate information on your credit reports, you simply have to wait for it to fall off. However, you can also take steps in the meantime to improve your credit. Here are some ways to add new, positive information to your credit reports and gain points faster:
- Make all of your credit card and loan payments on time.
- If you don’t have any credit cards or loans open, apply for a secured credit card.
- Have a loved one with good credit add you to their credit card as an authorized user.
- If you have open credit cards, pay down the balances as low as possible.
Help is available!
Credit scores are confusing. If you’re still not sure how to proceed, don’t give up. Instead, schedule an appointment with an NFCC-certified credit counselor for guidance.
Our credit counselors can help you read your credit reports and give you personalized advice on how to improve. With their help, you can pinpoint any and all opportunities to improve your scores as quickly as possible.
Updated by Sarah Brady
