How To Clean My Credit

There are two steps to fixing a damaged credit report

. However going through these steps can be incredibly frustrating! It is important to keep in mind that Congress passed the Fair Credit Reporting Act to help protect you from the bureaus. This act says that an item can only remain on your report for 7 years and provides you the right to dispute any items you feel are inaccurate. You can achieve credit clean up without just waiting seven long years!

Step #1

Settle outstanding debts. I am not advising you to just pay your debts as this alone will do nothing to remove negative items from your report or improve credit score. This is because the negative item will remain on your report despite you having made payment. Instead we would encourage you to seek debt validation with a bill collector before making payment.

This just means you write a letter asking the bill collector to validate and make sure this debt is correct and accurate. It is not uncommon for paid debts or mix ups to happen and next thing you know you are getting letters from a debt collector concerning a paid bill. In other words it is not uncommon for business to make mistakes and you have to pay the consequences.

First, we would advise you to have the debt validated. This is done by just writing a letter. If the debt is not validated then you don't have to pay it and you can have the negative item removed from your report. However if the debt is valid before you submit payment we strongly recommend that as terms of your payment the debt collector must stop reporting this negative item to the credit bureaus.

This is a standard negotiation request and the debt collector will almost always accept these terms right off the bat. The collectors concern is getting payment from you; they could care less about your report. It is just a tool that collectors use to intimidate people into making payment saying "this item will be negatively reported to the bureaus" We also would recommend that you always negotiate the settlement offer.

For example, if you have a debt of $2,000 then you should typically be able to settle for $1,000 or roughly 50% of your original debt. Depending on the age of the debt you may even be able to pay less than 50% of the total. Once your outstanding debts have been settled you need to move on to step #2.

Step #2

Dispute negative items on your report. The aforementioned Fair Credit Reporting Act gives you the right to dispute any item you feel is inaccurate. When you file a credit dispute, you must do so with each bureau. In other words you must contact each bureau separately and file a dispute with each one. Once the bureau decides you have a valid dispute they will investigate the negative item and if it is not verified then it must be removed from your report!

The difficulty comes to submitting a valid dispute to the bureau. Unfortunately credit bureaus are private businesses with no connection to the government except for being fined by the government for not complying with legislation (FCRA). The bureaus sell your information to businesses, not consumer like you and I. Therefore the bureaus have no incentive to ensure individuals' reports are in fact accurate, because it makes no difference to them. They are still paid from a business even if your report is inaccurate. In fact it is estimated that 1 in 4 reports carry an erroneous error, in other words 25% of all credit reports have a mistake on them!

If you are persistent you will have your negative items investigated by the credit bureaus. They will contact your original creditor or the bill collector and ask them to verify the debt. This is why we settled any outstanding debts with collectors and had them agree to the terms that they would stop reporting this debt to the bureaus. Therefore when they are contacted to validate the item, they will not validate it due to you settlement agreement and the bureau will have to remove the item from your report!

by: Jason Abmramsons

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