Are you wondering how to fix your credit? No one can legally remove negative information from your credit report if it’s accurate and current. But there are steps you can take to fix errors and improve your credit.
Maybe you’ve heard about credit repair companies and are wondering if they can help? Be careful: many are scams. Here’s what you need to know about how to fix your credit.
What makes my credit good or bad?
Your credit report has information about:
- whether you pay your bills on time
- what loans and credit cards you have, and what you owe on them
- whether you’ve been sued or arrested or have filed for bankruptcy
The more positive information you have in your credit report, the better your credit will be.
What happens if there’s negative information in my credit report?
Credit bureaus sell the information in your credit report to creditors, insurers, employers, and other businesses that use it to make decisions about you. If there’s a lot of negative information in your report, you could have trouble getting a loan, or might have to pay more in interest. You also could be turned down for a job, insurance, or some services.
Can I get negative information removed from my credit report if it’s true?
Only time can make it go away. Most negative information will stay on your report for seven years, and bankruptcy information will stay on for 10 years. Unpaid judgments against you will stay on your report for seven years or until the statute of limitations runs out, whichever is longer.
There are exceptions. In certain situations — like when you seek a job paying more than $75,000 a year, or a loan or insurance valued at more than $150,000 — a credit bureau will include older negative information on your report that wouldn’t show up otherwise.
Each of the nationwide credit bureaus — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months if you ask for it. Go to annualcreditreport.com, call 1-877-322-8228. Otherwise, a credit bureau may charge you a reasonable amount for another copy of your report within a 12-month period.
How do I know what’s in my credit report?
You can order free reports from each of the three credit bureaus from annualcreditreport.com at the same time, or you can stagger your requests throughout the year. Some financial advisors say staggering your requests during a 12-month period may be a good way to keep an eye on the accuracy and completeness of the information in your reports. Because each credit bureau gets its information from different sources, the information in your report from one credit bureau may not reflect all, or the same, information in your reports from the other two credit bureaus.
What if I see a mistake on my credit report?
You can dispute mistakes or outdated items on your credit report for free. Both the credit bureau and the business that provided the information about you to a credit bureau are responsible for correcting inaccurate or incomplete information in your report.
Make sure the information in your report is accurate, complete, and up to date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
How do I dispute mistakes on my credit report?
To take advantage of all your rights, contact the credit bureau and the business that reported the information. You should send a letter with the following information:
- your complete name and address
- each item you’re disputing, and why
- copies (not originals) of documents that support your position. Ensure that the account number is visible.
- a request that the mistake(s) be removed or corrected
Many businesses specify an address for dispute so review your documents to ensure that you are sending the dispute to the correct address.
What about credit repair companies?
People hire credit repair companies to help them investigate mistakes on their credit reports. Credit repair companies can’t remove negative information that’s accurate and timely from your credit report.
Anything a credit repair company can do legally, you can do for yourself at little or no cost. Only time and a personal debt repayment plan will improve your credit.