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How to clean up a credit report

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How to clean up a credit report
How to clean up a credit report

Everyone is entitled to one free copy of their credit report per year. It is wise if they take advantage of this opportunity and view this important document themselves. A credit report plays a large role, influencing people from employers to landlords. Credit checks have become more pervasive as a credit rating is seen as shorthand for the trustworthiness of a particular individual. A bad credit report can prevent someone from getting the job, apartment or even home they want.

The answer to the question, “How to clean up a credit report?” is actually simple. The process involves legalities and formalities and can take some time, but it is fairly straightforward. The first step is to actually request a copy of the report. This can be done by contacting the three credit bureaus, Experian, Equifax and TransUnion, and requesting a copy from each one. The three reports should match one another somewhat precisely. Keep these reports until the next year and then shred them.

Get out all copies of credit card statements, loan applications and any other financial records pertaining to credit. Compare the statements with the credit reports and note any discrepancies or errors. A common error is for a credit bureau to continue reporting a debt as current despite the fact it has already been paid. Make a detailed list of all errors, including omissions, and prepare a letter to each credit bureau. Tailor the letters so that they match the specific errors on each bureau’s copy of the credit report.

The credit bureaus must respond to their respective letters within 30 days. During this time period, the bureaus are required by law to investigate each individual error and resolve it. Items the bureau finds are incorrect or items that the creditor cannot prove with the relevant documentation must be removed from the report. If the bureau responds and says some or all of the items are correct, the next step is to contact the creditor. Creditors are prohibited by law from knowingly reporting inaccurate information. Contacting them should resolve the dispute in the customer’s favor.

After removing negative information, how to clean up a credit report involves getting positive information into the report. Open a credit card account and make responsible purchases. Pay the balance in full every month. After two years, the borrower should qualify for most major loans. After four years, the borrower should qualify for a mortgage loan.

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