How Can I Remove Blemishes from My Credit Report? (2024)

Dear Lifehacker,
I recently checked my credit report and found a couple late payments that brought my score down, and even a couple of errors that weren't my fault! Is there a way to get these off my record?

Signed,
Cleaner Credit

Dear CC,
Fixing your credit report is a smart financial move, since your credit report can affect everything from loan and insurance rates to your employability. Whether the black marks on your report are inaccurate or due to your own negligence (don't worry, many of us have been there too), you don't have to just accept those negative items on your report, dragging your credit score and entire financial future down. Here's how to address both situations.

Fix Errors on Your Credit Report

Mistakes on credit reports happen more often than we might think: More than a quarter of Americans have negative items on their reports that weren't of their doing. These mistakes usually happen due to clerical errors or information pulled in about someone else, and they can be costly. When reviewing your free annual credit reports, you should always check to make sure each account is really yours and whether any negative items actually happened. If you find errors, there are two steps you should take.

Step 1: Contact the credit bureaus. If there are mistakes, you should first contact each of the three credit reporting agencies to dispute the inaccurate item(s). By law, the credit bureaus have to investigate any inaccurate information—usually within 30 days. All three bureaus allow you to dispute an error online (and Experian only handles disputes through its website). Online disputes may be convenient and fast, but not the best way to go. Instead, if possible, mail a letter with supporting documentation (certified mail, return receipt requested) so you have a paper trail and can attach more documentation or explanation. For example, you can attach copies of cancelled checks showing you made payments, highlight errors in the credit report, and so on.

This sample letter from the FTC can help you get started, and here are the addresses for the three bureaus:

Equifax

1-866-238-8067
Equifax Disputes
P.O. Box 740256
Atlanta, GA 30374-0256

Equifax Disputes

Experian

Experian Disputes
All disputes with Experian are handled online.

TransUnion

1-800-916-8800
TransUnion Disputes
2 Baldwin Place, P.O. BOX 1000
Chester, PA 19022

TransUnion Disputes

Usually the dispute form or letter is enough to get errors taken off your report, and you'll hear back from the bureaus both acknowledging your dispute request and its resolution.

Step 2: Contact the creditor. You should also contact the creditor or lending institution telling them of the information you're disputing, says myFico:

Again, include copies of documents that support your position. Many providers specify an address for disputes. If the provider again reports the same information to a bureau, it must include a notice of your dispute. Request that the provider copy you on correspondence they send to the bureau. Expect this process to take between 30 and 90 days.

In many states, you will be eligible to receive a free credit report directly from the credit bureau, once a dispute has been registered, in order to verify the updated information. Contact the appropriate credit bureau to see if you qualify for this service.

Unfortunately, sometimes credit report errors take an awful lot of work and time to get corrected—months in which you could be waiting to close on a home or other big loan. In those cases, you have to keep following up and disputing the errors numerous times (the more supporting evidence you have, the better). You could hire an attorney or credit repair firm to help you, but know that this could cost hundreds of dollars, and there's no guarantee of resolution. A credit repair company can't do anything more than you can on your own to get your credit report fixed; it's just a matter of hiring someone to write the letters and follow up for you.

If you've got collections agencies after you for unfounded debts, there are additional steps you can take.

The silver lining in this mess for the many people who have errors on their credit reports is that the Consumer Financial Protection Bureau recently announced they'd be cracking down on lenders who fail to closely review and respond to contested errors. So it's getting better, but the takeaway is it's still up to you to find and report those errors to both the credit bureaus and the creditors.

Negotiate to Get Valid Black Marks Taken Off

What if your report has negative information on it that is accurate (e.g., you did miss a payment)? In this case, you still have a couple of options.

Option 1: Ask the creditor for a "goodwill adjustment" to remove a late payment. You might not be aware of this, but many creditors are willing to "forgive" late payments and adjust your credit report (or even remove the entire account from being reported to the bureaus) if you have a good previous relationship with the lender, the Better Credit blog says. To do this, you'll need to write a letter to the creditor explaining your situation (you've been a loyal customer for years, had a medical problem and missed a payment, etc.) and hope that the company will remove the black marks on your credit report.

You can find sample goodwill letters here and here, but make sure you personalize it so it sounds sincere, rather than cookie-cutter-ish. Your success will depend on the lender and the person reviewing your request, but it's worth a try if you've got an otherwise stellar credit history with the company but a blip or two on your record due to rough circ*mstances and such.

Option 2: Negotiate removal of the negative information. If your account is still open and you have a previously good relationship with the lender/creditor, you could also possibly negotiate having the marks removed by offering some sort of payment or repayment plan. For example, set up automatic payments in exchange for the creditors removing the late payment entries. Call up your creditor and ask to speak to a manager to explain your situation and see what's possible and then get the agreement in writing.

Note, however, that if you settle with a lender for reduced payments or start making payments on a closed, old debt, that could hurt your credit score even more. As Experian explains:

When you negotiate a reduced pay off amount, you are actually settling the debt for less than you owe. As a result, the lender will likely report the account as “settled” rather than “paid.

Anytime an account is reported as not paid in full or not paid as agreed, it will have a negative impact on credit scores.

If you make a payment towards an old, closed account that creditors consider a "charge-off" (i.e., they don't expect you will pay the debt), that payment would make the account current, thus dragging your credit score down. Credit Sesame says:

Don’t pay that old charge-off

Often, consumers think that they can improve their score by dealing with old charge-off accounts. Dealing with an old charge-off can actually work against you. Charge-offs will drop off of your credit report after seven years. If you make a payment to settle an old charge-off, it will actually update the date of the charge-off and it will appear on your credit report for another seven years. The only exception would be if you can get them to agree to remove the account entirely from your report. Again, get it in writing.

Your best bet for the biggest credit score boost is to first pay off in full any current debts showing as delinquent and then carefully consider what to do with older debts, weighing how much time is left before they fall off the record (and any moral qualms you might have about not paying your debts).

Option 3: Wait. If none of the above work for you, know that time heals all things—even bad credit. Most negative items will drop off your report in seven to ten years. There are some exceptions, such as unpaid tax liens and defaulted student loans, but in general, you can leave the negative marks behind and start building better credit with consistent on-time payments and other smart credit moves.

Also, know that even if you have a 30- or 60-day late payment or two, it probably isn't as catastrophic to your credit as you might worry, as long as the account isn't currently past due and late payments aren't a recurring pattern. Credit.com says [emphasis mine]:

Because scoring systems are so focused on predicting whether or not you'll go at least 90 days late, surprisingly, an old 30 or 60 day late payment is actually not that damaging to your credit scores as long as it is an isolated incident. Only when your accounts are currently being reported 30 or 60 days past due on your credit reports, will your credit scores plummet temporarily.

If 30 or 60 day late payments are an infrequent occurrence, this kind of low level late payment will damage your credit score

only while it is being reported as currently past due

. They shouldn't cause lasting damage to your credit score after this period passes unless you make 30 or 60 day late payments on a regular basis. In this case, the fact that you are habitually late with your payments

will

cause long term damage to your credit scores.

Avoid having a 90-day late payment at all costs, because that will drag your score down for seven years even if you're not currently past due on the account:

90 days late - This record will damage your credit scores significantly for up to 7 years. It doesn't make a difference whether or not your account is currently 90 days late. Remember, the goal of the scoring model is to predict whether or not you will pay 90 days late or later on any credit obligation. By showing that you have already done so means that you are more likely to do it again compared to someone who has never been 90 days late. As such, your credit scores will drop.

Prevent Credit Problems in the Future

As you clean up your credit reports, start taking steps to prevent similar problems in the future. Request your free annual credit reports (perhaps use your birthday or some other important date as a trigger or reminder), use credit monitoring and automated bill payment services (e.g., Credit Karma, ReadyforZero), and otherwise proactively manage your credit reputation.

Good luck!

Love,
Lifehacker

Photos by Nick Criscuolo, R. Gino Santa Maria (Shutterstock), wssst.

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