Traditional Methods–
Clean Up Your Credit Report

In a perfect scenario you would have the ability to pay off any past due or detrimental listings but that’s probably not possible. But there are several things you can do to improve your credit score. 

First you need to get a copy of your credit report from each credit bureau. The good news is that all three credit bureaus now have to provide a free credit report every 12 months. Go to the Federal Trade Commission’s site here and to get the full details:

http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm

As it states on the web page, there is only one site that is the authorized provider:

https://www.annualcreditreport.com/cra/index.jsp

Once you have a copy of each report, you may notice several things. The most obvious is that your credit score may be different on each report. How does this happen?

Remember that the credit bureaus use different methods that may be based on the FICO scoring but also may include some specific methods used by the individual bureau. Each creditor may or may not file information with all three credit bureaus, that can be a big factor.

But you’re main objective is to remove any inaccurate or incorrect information from any credit bureau. Using the information provided in the previous chapter, review each item to create a list of possible challenges. A dispute is the method you use to request the information be validated by the issuing source (in most cases a creditor who has filed this information).

According to the FCRA, the consumer reporting company and the information provider (company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your credit report.

It is the responsibility of each credit bureau to go back to the creditor and ask them to provide details and specific information on any item you feel is incorrect or inaccurate. There are specific timelines required (normally 30 days but they can request additional information from you and that can extend the period to 45 days).

You can view a sample credit report dispute letter in the sample dispute letter section. You should insure that you follow the sample to make sure you provide all the basic information and don’t give them a chance to extend the period of response. It is also highly recommended that you send this dispute by certified mail to give you a undeniable starting date and proof of delivery.

All three credit bureaus now let you file a dispute through the Internet through their websites. Based on recent reports from consumers, this appears to be a much faster method than snail mail. The credit bureaus still get the full 30 days but often react faster to electronic fillings. Keep in mind that the creditor plays a large role in how fast they respond to these disputes. 

Possible Credit Report Disputes

Information is not based on you (mistaken identity)
Information is inaccurate based on what actually occurred.
Information is outdated – there was an issue but it has been resolved.
The time limit on the information has occurred.
The information is totally incorrect with no valid basis

There appears to be a lot of misinformation about the disputes, the process, and the results. Based on the feedback of many consumers, credit bureau personnel, creditors, and other respected sources, here’s a few tips and facts.

How to file a dispute about an item on your credit report.

The first step is to send a letter (or file online) explaining your dispute to the consumer reporting company. This letter or online request needs to state what information you think is inaccurate. Include copies (keep your originals - you may need them later on) of documents that support your dispute. You need to provide your complete name and address, a clear description of each item in your report you dispute, explain why you dispute the information, and request that it be removed or corrected. You should include a copy of your report with the items in question circled. If you are mailing your dispute, send it by certified mail, return receipt requested, so you can document the date and content of what consumer reporting company received. Keep copies of everything.

Should I dispute all negative entries, regardless of merit?

This is a popular method by many credit repair companies. The idea is to hope that even accurate information will not be reported due to the sheer volume that any large creditor may receive every day. Given that creditors have computers too, and that many have automated systems to track customer data, this normally does not work. Plus, if the dispute is considered “frivolous”, they don’t have to respond at all. What it does is overload the system and slow down the process but the end result is information is still provided that reflects the original negative.

Should I contact the originator of the negative entry?

This is an often overlooked method for getting negative items removed from your credit report. This can be a good idea if the originator will remove the item and of course that the two of you can reach an acceptable solution to do so. If you want to address the negative information directly with originator be sure to ask if they will remove the negative item, how quickly, and if they will provide that information in writing. Many times you can negotiate the amount of money or settlement (to a lower amount), always keep that in mind. If you are dealing with a collection agency, be very careful, and make sure you get everything in writing and it is according to your agreement. These folks can be very sophisticated and normally have a vested interest (they receive a portion of the recovery or fee for collection).

You’ve filed your disputes, now what happens?

Credit Bureaus must investigate the disputed items in question within 30 days, unless they consider your dispute frivolous. They must also contact the organization that provided the information and provide them with your submitted documentation. When the originator receives notice of a dispute from the credit bureau, they must investigate and review the relevant information. Once they have completed their investigation, they in turn must report


the results back to the credit bureau. If the originator finds the disputed item is inaccurate, they must notify all three nationwide credit bureaus so they can correct the information in your credit file.

When the investigation is complete, the credit bureau must then provide you the results in writing and a free copy of your report if the dispute resulted in any change. This free report does not count as your annual free report. If an item is changed or deleted, the credit bureau cannot put the disputed information back in your file unless the originator verifies that it is accurate and complete. The credit bureau also must send you written notice that includes the name, address, and phone number of the originator.

*Warning* We have had many consumers tell us that after all the time and effort spent on removing inaccurate information (and it is in fact removed) that they see it reposted in the next few months. Always keep copies of everything in case the same dispute pops back up on your credit report.

What if I have been denied credit due to no credit or insufficient credit on file?

In many cases, your credit file may not reflect all your credit accounts. Some creditors don't supply information to consumer reporting companies. Some Oil Companies, entertainment, travel, small local retailers, and credit unions are among the creditors that don’t.

If you’ve been told that you were denied credit because of  little or no information in your credit file and you have accounts with creditors that don’t appear in your credit file, ask the creditor to add this information to the credit bureaus. Although they are not required to do so, some will add verifiable accounts if you ask. If the creditor doesn't report on a regular basis, then this information will go away. In our The Future chapter we provide some examples of creditors that you can start an account with and do report on a regular basis.

What if I have been denied credit due to high balances on my credit cards?

This is one of the few issues that you cannot negotiate or remove without paying down the credit card balances. This should be a priority anyway since you are most likely paying outrageous interest rates on these balances. If the balances reflected don’t match your records, go ahead and file a dispute and get the balance updated. You also may be able to show an increase in income, which would lower your debt to income level, and that may lessen the impact of high credit card balances. We are working on a credit card specific document that will provide some more details on reducing your credit card dependencies and balances. Check back in the next few weeks to find out more.