How to Get Rid of Bad Marks on Your Credit Report
Credit report errors are so common they are the number one complaint on the CPB’s website , according to an analysis by LendEU , a student loan refinancing company. And while you may think of them as annoyances, these mistakes can have serious consequences for your financial life.
One example: According to a recent study by Lexington Law, more than 70 percent of people who have been denied mortgages are turned down because of bad credit, and these low scores are often the result of a mistake on someone’s report. According to the Federal Reserve Bank of New York , only nine percent of mortgages were issued to subprime borrowers in the second quarter of 2017. In other words, if mistakes in your report lower your rating, good luck getting your mortgage approved.
But there are ways to remove negative marks, no matter how inconvenient they are.
Check age
The most negative information will remain on your credit report for seven years , except in bankruptcy cases, which last for 10 years. After that, it should drop out of your report – otherwise, the bureau may indicate the wrong date for the debt, in which case you need to send them proof of when the debt arose (see below how to do this).
However, it gets complicated and varies from state to state, so read this Credit.com report for more details .
(According to Credit.com , “good” accounts that have been closed usually fall after 10 years, but usually good grades will remain indefinitely.)
Compare your 3 credit reports
Your credit reports at Equifax, Experian, and TransUnion will be different and may indicate different debts or errors. You can download them for free once a year from AnnualCreditReport.com. If there is an error, please contact the Bureau of them to remove it – they can easily follow the instructions on their websites ( Equifax ,Experian , TransUnion ), or you can file a complaint by registered letter ( the Federal Trade Commission and CFPB have a sample dispute letter can be. send). Your letter must include the following, according to the CFPB:
- Contact information for you, including full name, address, and telephone number.
- Report confirmation number, if applicable
- Be clear about every mistake, such as the account number for any account you may dispute.
- Explain why you are challenging the information
- Request deletion or correction of information
- Attach a copy of the controversial part of your credit report and circle or highlight the controversial elements. You must attach copies (not originals) of documents supporting your position.
Keep copies of the letter. The Bureau will investigate within 30 days and send you a response. If the bureau corrects your report, it must notify all credit reporting companies to which it sent inaccurate information.
You can also send a letter to your lender – for example, the credit card company or landlord – telling them that you are contesting the error on your report. The CFPB has a sample letter for them.
Contact federal regulators
If reaching out to creditors does not work, you can also file a complaint with their regulators and / or file a complaint with the CFPB .
Again, you will want to send your complaint by certified mail to the lender’s regulatory authority and keep a copy.
Get a lawyer
After all this, you may still have errors in your report: In 2015, the FTC conducted a 2012 survey and found that of 121 consumers who had at least one unresolved dispute about their 2012 report, 84 consumers (about 70 percent) still believe that some information is incorrect. As you can see, this may take a while.
Why is this happening? Because the credit bureaus just don’t really care about mistakes that affect your creditworthiness. “Credit bureaus don’t want to spend money investigating disputes [because] there is no profit for them,” Chi Chi Wu, a staff attorney at the National Center for Consumer Rights, told Time in 2012. damn it, from the dispute system. “
Hiring a lawyer or credit repair agency is likely to cost hundreds of dollars and there is no guarantee that the problem will be resolved. But if you don’t have enough time – say, you are trying to close the house – then it will be worth it.