If you have a less than stellar credit score and are looking to improve this number then removing negative information from your credit reports is a crucial step. Contrary to popular belief you don't just have to live with bad credit for 7 years, a little-known secret is that bad credit often lasts much longer than 7 years as debt collectors will attempt to report your account past its legal reporting date.
You are able to request that the credit bureau investigate any item on your credit report. This is provided to you by the Fair Credit Reporting Act a piece of federal law that also says the maximum amount of time a debt can remain on your credit report is 7 years.
When the credit bureaus investigate your dispute they will contact the lender or debt collector and ask them to verify the account and other relevant information such as the total amount owed. If the credit bureaus are unable to verify this account then according to the Fair Credit Reporting Act. They must clean credit report information regarding that account.
Frequently debts are not verified when the credit bureau investigates because the debt collector or lender has sold the account to another collection agency. Therefore the lender has nothing to gain by verifying your account with the credit bureaus and instead will be spending money on man-hours and resources to even keep records of your account.
Steps To Clear Your Credit Report
1. You need to get a copy of your credit reports from each credit bureau. The Fair Credit Reporting Act entitles you to one copy from each credit bureau every year and you can get these at annual credit report.
You need to go over these reports in detail and identify what items you believe are questionable and you would like to have removed. These items would include: charge-offs, repossessions, collection accounts, tax liens…
2. You need to send a dispute letter to each credit bureau to have them investigate or you can hire a credit repair law firm to file this on your behalf. In your letter you need to identify the item you are disputing, your personal information, a reference to the Fair Credit Reporting Act, the reason for the dispute, and any supporting evidence. You can dispute an item for many reasons such as: the debt is older than 7 years, the balance is wrong, the dates are wrong, it is not my account, the account is paid,…
3. Once the credit bureaus get your dispute letter and deem your credit dispute valid they will conduct the investigation. You will be notified of the results of their investigation by mail and they will tell you if the item was verified or if it was deleted from your credit report.
If the credit bureau does verify your account that does not mean you have to just live with this bad credit instead you can fix your credit. Frequently you can negotiate with the collection agency to settle the debt and in exchange have them stop reporting the account to the credit bureaus. Additionally it would be in your interest to negotiate your settlement payment because often collection agencies will settle for only a fraction of the total amount owed on the account.
As a result of the mortgage crisis and subsequent crisis in our financial markets getting approved for new credit is harder than ever before. In other words your credit score has never been more important or more influential in the quality of life you are currently living then it is today. Take action to clean up credit report and remove bad credit so that you can get the score that is truly reflective of the credit worthiness you deserve.