Many people believe that improving a credit report with negative items literally takes years. In reality, with a little knowledge of the law, almost anything on a credit report can be disputed. Even better, the burden of proof in regards to determining if a negative item belongs on a person's credit report lies with the credit bureaus.
Of all the records in a person’s life—from bank records to
driving records—a credit report seems to be the one true permanent record. For a person with past credit problems, a
credit report is probably the one record that is feared the most. In fact, many people with credit problems try
to avoid looking at their credit report simply because it brings back memories
that they would much rather forget.
Even worse, once bad payment histories have been placed on a
credit report, it seems almost impossible to remove the negative marks. If you listen to many of the financial gurus,
they will tell you that it takes years to remove late payments histories and
charged-off accounts from a credit report.
In reality, however, the opposite can be true. Most people do not realize that when it comes
to removing items from their credit reports, the law is actually on their
side. With a little knowledge, and the
proper tools, removing negative items from your credit report can take mere
The information contained within this article is not theory
or pie-in-the-sky ideas. They are tried
and true methods that have been used by others to quickly and easily repair a
negative credit report. The real secret
to using this information successfully is using the techniques diligently—and
not getting frustrated by the process.
The financial gurus may be wrong that negative marks cannot be removed
from a credit report, but they are correct in saying that a negative credit report
was not created overnight—so it will not be repaired overnight, either.
Credit Reports: A Quick Lesson
For those people who have ever been turned down for a credit
card or loan, they have probably had to quickly get educated about a credit
report. Credit reports are records of
payment histories. When a credit card of
loan is taken out, the lender typically reports how a person pays on that loan
to the three major credit bureaus—Experian, TransUnion, and Equifax.
If a person always pays their credit cards and other loans
on time, the lenders report this to the credit bureaus. However, if you are a month late—or worse,
two months late—this is also reported.
The more records that show late payments, and the longer the duration of
the late payments, the lower your credit score becomes. Lower credit scores usually resort is more
difficulty acquiring credit cards and loans, and higher interest rates when you
Besides late payments, there are other things that can lower
a person’s credit score. Of course, the
biggest hit that a credit report can take is a bankruptcy. However, many people do not realize that
applying for a lot of credit also lowers their credit score. Every time that a lender obtains a copy of
your credit score, a record of that—called an inquiry—is noted on your report. Having several inquiries in a three month
period results in a lower score.
In addition, opening several new lines of credit at the same
time can lower your credit score. This
is viewed as a problem because other lenders view having access to too much new
credit as a potential risk. People who
experience financial hardships often rely on their credit cards, regardless of
whether they can make the payments at the end of the month.
Finally, it is important to realize that payment histories
of past credit cards, loans, and bankruptcies remain on a credit report for
7-10 years. The past two years of
payment histories are usually the most important, but the record of a
charged-off credit card can remain for a decade.
The credit bureaus make their money by storing your
information, and then selling it to companies who want to check up on your
credit history before extending a loan.
Many people are under the assumption that these companies are doing a
public service, and by virtue of that public service have some sort of
obligation to make sure that their information is 100% accurate.
In reality, while these companies do make every attempt to
keep accurate records, they are in the business of making money. They make that money by selling their
records, not by being fact-checkers and researchers for the masses. The fact that many people have inaccurate
information on their reports is what helps the person who wants to clear
negative information that is correct from their report.
What the Law Says
Federal credit laws state that any item on a credit report
can be disputed to the credit bureaus.
The beauty of this is that the laws also state that any dispute must be
invested, and the burden of proof lies with the bureaus—not the individual.
In addition, the credit bureaus have 30 days from the time
they receive the dispute to investigate it.
After 30 days, if they cannot confirm the dispute with the lending
company, then they must remove the record from the credit report. All of this is much to the advantage to the
When the credit bureaus investigate a disputed item, they
typically contact the lender either by phone or with some type of message. Well, let’s consider that lenders are
constantly sending data to the bureaus, as well as being asked for information
concerning disputes. It is easy to see
that not all disputes receive a reply.
In fact, some lending companies are pretty good and not answering
disputes. This is another plus for a
person trying to erase negative information
Finally, and perhaps most importantly, the law says that
anything can be disputed—even if it is accurate. So, if you have negative marks that are true,
they can still be disputed and must be investigated by the bureaus. This includes open lines of credit, inquiries,
and even bankruptcies.
How to Write a Dispute
The best and most effect way to dispute items on a credit
report is in a letter. Many companies
offering access to credit reports now give online methods to dispute
items. In addition, the credit bureaus
themselves have their own forms and methods.
The bottom line is simple: DO NOT USE THEM!
The reason for this is that it makes the job of the credit
bureaus easier. If you use their forms,
they typically do not take the dispute as seriously. A written letter from the consumer shows that
you have taken the time to investigate your credit report, and you believe
something is incorrect and needs investigation.
When writing to the bureaus, it is important to include
certain things, and to leave out others.
First, you want to state that you have reviewed your credit report and
have found mistakes. Then, you want to
list each mistake. Next to each item you
are disputing, simply list that the record is not yours. Do not give any further details. The more information you give, the less work
the credit bureaus have to do—and the more likely they are to confirm the item
and leave it on your report.
After your have listed each item that you wish to dispute,
the final paragraph of the letter should read something similar to that listed
“Please investigate these inaccuracies and remove them from
my report. Under the Fair Credit
Reporting Act, 30 days constitutes a reasonable time to remove the
mistakes. In addition, if you confirm
any of these items, you must supply the names and addresses of the people
This tells the credit bureaus that you understand your
rights under the law, and that you are serious about wanting to correct your
When to Dispute
There are certain times of the year when disputing items
with the credit bureaus can be more fruitful.
The best time to send disputes to the credit bureaus is December. The time between Thanksgiving and New Year’s
is filled with holidays. This gives the
bureaus less time and fewer people to investigate disputes. In addition, the companies to whom they are
sending disputes have less time and fewer people to respond.
Another important piece of information is that dispute
letters can be sent every month. Simply
because your dispute letter in July did not bring favorable results does not
mean that you should stop. Send another
one in August. Every time that a dispute
is sent, an investigation must be done.
This is one area where persistence can truly pay off.
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