Let’s face it. Credit reports are far from perfect. After all, they rely upon individual creditors and credit bureaus working hand-in-hand to collect data about you and report it accordingly. Obviously somewhere in the process of parsing the data of millions of accounts mistakes will be made. It’s human nature.
For this reason, consumers often inquire about removing late payments, collections, charge-offs, and generally all things negative from their credit report. And while it’s not always possible to completely erase all these items from your credit report, there is a process that allows consumers to challenge their presence. It’s a simple, organic way to perform self credit repair, with little work and no cost involved.
Write a Letter to the Credit Bureaus
There is a little known rule in place that allows consumers to write to the credit bureaus to dispute any negative items that show up on their credit report. The rule is intended to let consumers challenge creditors if they feel any information is being reported in error on their credit report. Put simply, it means credit history isn’t written in stone, and there is indeed wiggle room when it comes to removing negative items from your credit report.
If you feel that something is reporting in error on your credit report, or you flat out don’t agree with it, simply write a letter to one of the three credit bureaus, whether it’s Equifax, Experian, or TransUnion. The credit bureau will then attempt to make contact with the creditor to validate your dispute.
If Creditor Doesn’t Respond, Negative Item Will Be Removed
If the original creditor doesn’t respond to your letter within 30 days of receiving notice of your inquiry, the credit bureau will automatically take your side and the negative item will be removed from your credit report. Regardless of whether it was a mistake or truly late/derogatory, the item will be removed from your credit report for lack of a challenge or response from the issuing creditor.
This process is similar to the loophole surrounding traffic tickets where showing up to court in the hopes that your arresting officer doesn’t will cause the court to waive the ticket regardless of fault. Gotta love the system folks. It can be your best friend or worst enemy.
Many consumers don’t know about this seemingly simple credit loophole, and some may foolishly enlist so-called credit experts to complete this basic task for them at a premium. While credit repair companies could be useful, this is one credit repair fix you should be able to complete on your own..
Your Credit Score Should Jump
Assuming the negative item is removed from your credit report, your credit score should increase shortly after. How much it will rise depends on the severity of the item removed, and also what else appears on your credit report. If your credit report is perfect otherwise, the increase could be substantial. If you have a bunch of other negative items, the change in score could be minimal.
Be sure to provide the other two credit bureaus with the dispute documentation as well so they can update their information accordingly. This is very important because you’re only as good as all 3 of your credit scores. If one is fixed, and the other two are still affected by the negative item, you’ll be running the risk of a creditor pulling one of the bad credit scores.
Lastly, note that this process does take time, so you should act as soon as possible to get any and all negative items removed. It can take several months to complete, and even longer before it is reflected in your credit scores.
This tip is definitely worth a shot as it costs no money and requires little effort beyond writing a brief letter and licking a stamp. And now it can even be completed online!
Learn more: How to execute a credit report dispute.
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