How to remove derogatory items from your credit report


Note that the situation for many types of debt has changed due to the impact of the coronavirus outbreak and the relief efforts of the government and others. Specifically, AnnualCreditReport.com (see below) now offers free credit reports on a weekly basis, rather than once per year, until April 2022. Consult our Student Loans Hero Coronavirus Information Center for news and additional details.

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Payment delays occur. Missed payments too. While most borrowers have the best of intentions, sometimes the debt becomes overwhelming and payments are forgotten.

Essentially, accounts with a perfect payment history help your credit, while a deviating account (with late or missed payments) hurts your credit score and interest rates when applying for new credit.

If you have an old past due or otherwise negative account in your credit history, you may be wondering how to remove the derogatory items from your credit report. While it’s not always easy, it is possible to get negative information removed if you take the right steps.

Here’s how to remove derogatory ratings from your credit report before it naturally falls off (usually after seven years) and how the process works.

Look for negative information in your credit history

You may not even know if you have an overridden account in your credit history. So you should start by getting your free credit report.

You can get your credit report from many different services. But by law, each of the three major reporting bureaus must provide you with a free credit report every year. And during the coronavirus pandemic, consumers are entitled to free weekly reports until April 2021, via AnnualCreditReport.com, the official US government site.

When you open your credit report, you can find a list of all the overriding accounts. These include any account with a late or missed payment.

Below is an example screenshot showing a credit card account with 30 days overdue from July 2011. You can see that this is a pejorative part of the color. – some reports show yellow and red boxes – and we know it is a 30 day late payment because the box says “30” in it.

Image: Eric Rosenberg

Go through your credit report and make a list of all negative information. Then compare with your records to make sure everything is correct.

If it is not correct, it is imperative to delete it. And if it’s accurate, it’s harder to remove, but still possible.

Dispute incorrect negative information

If you find a derogatory account that is incorrect, you can file a dispute with the credit bureau to have it removed.

A real life example of how to remove derogatory elements from the credit report

“In 2009, I found such an item on my credit report and filed an online dispute with TransUnion. The credit bureau provided the report with incorrect information.

“I filled out a short online form explaining the error and a few days later received a response that they had contacted the institution, verified the information and had been deleted. Talk about a piece of cake.

– Eric Rosenberg

You can file a dispute from a link provided in your credit report on AnnualCreditReport.com, or through one of the links below.

Keep in mind that you may need to create an account with the credit bureau to complete the process. But you don’t need to purchase a subscription or other paid service from these companies in order to remove a derogatory mark.

You can also file disputes by mail. However, the online dispute process is much easier for anyone who is comfortable with a web browser.

Information bureaus are required by law to deal with disputes in a timely manner, typically within 30 days or less, according to the Federal Trade Commission. Removing inaccurate negative information from your credit report is one of the fastest ways to improve your credit score quickly.

Remove derogatory items from credit reports

So what if the negative information on your account is legitimate? Deleting this information is much more difficult, but not impossible.

Negative information typically stays on your credit report for seven years for old credit accounts. Bankruptcies last even longer, with a 10-year period before they appear on your credit report.

How long do derogatory notes stay on your credit report?
Missed payment7 years
Debit account7 years
Repossession7 years
Collections7 years
Default or default on a student loan7 years
Debt settlement7 years
Bankruptcy7 years (for chapter 13) or 10 years (chapter 7)
Foreclosure7 years
Tax privilege7 years (or more if it’s unpaid)
Civil judgment7 years

You can still wait seven years for the information to disappear, but you can try to delete it sooner. The method to have negative information removed from old accounts is simple: call and ask.

If you call and ask a creditor to remove a late payment or other negative information from your history, remember they don’t have to. Basically, they’re doing you a favor if they keep going.

Ask very kindly and consider using a few points below to gain sympathy from the call center representative you are speaking with.

  • Explain that you were going through difficult financial times and have since made all payments on time.
  • Tell them you’ve learned your lesson, changed your ways, and are still making your payments on time now.
  • Discuss how your credit mistakes from years ago are holding you back even though you are currently making payments on time.

You can also summarize these points in what is called a goodwill letter, which can appeal to the sympathy of the creditor.

They can always say no, in which case your best bet is to ask for a supervisor and repeat what you said in the first person. Some success stories indicate that supervisors are much more likely to approve this type of request than the first person to answer the phone.

Can you pay to remove derogatory marks from your credit report?

The so-called “pay to delete” strategy requires you to offer to pay the old account in exchange for deleting negative credit information.

If your goodwill letter doesn’t do the trick and you have the financial means to do so, paying for the removal might be worth it. This could convince your disgruntled creditor to remove the derogatory mark from their credit bureaus reports.

However, this is where the problem with the payment suppression strategy lies: the credit bureaus generate your report, and they will not be in the game.

Be patient

There are times when a business simply won’t make the change. This means that you are finally stuck waiting.

Fortunately for older accounts, a lot of time has already passed and seven years may not be that far away. After seven years, the history of late payments will be automatically deleted.

Remember to always make payments on time to prevent such situations from happening again. Understand how your credit score is calculated and use credit to improve your life in the future once the negative information stops holding you back.

You are solely responsible for your credit history. So make sure you take ownership and commit to managing your loan and credit accounts perfectly in the future. Eventually, you’ll have good credit and have access to your best student loan, mortgage and interest rate refinance deals available.

André Pentis contributed to this report.

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