If your credit score isn’t where you want it to be, you probably already know that it’s the negative things on your credit report that are causing your score to drop the most.
These items will eventually fall off, but what’s the best way to do it and is there a way to speed up the process? Let’s dive in and see.
How long do negative items stay on your credit report?
It depends on the object, but most will fall off after seven years. Yes, I said seven years. I know it’s long. This is even longer for a Chapter 7 bankruptcy, which takes 10 years to fall.
But before you bow your head in desperation, you should know that the impact of negative elements on your score will diminish before those seven (or even 10) years are over as long as you don’t get it wrong again. This decrease can start in a few months for a minor incident such as a 30 day delay to over a year for a very serious problem such as a write-off or bankruptcy.
Is it possible to remove them before they fall?
No matter what you’ve heard or heard to the contrary, it’s usually not possible to remove accurate and timely data from your credit report. If you’ve truly defaulted on a loan or a credit card and it’s not been seven years, that element is going to stick.
This includes items that may exceed the statute of limitations (SOL) for your state. Items that are too old to recover in court under the SOL and that are less than seven years old will still appear on your credit report. It’s also important to understand that until a legitimate debt is paid off, you still owe it even if you can’t be sued or it fell off your credit report.
However, inaccuracies and outdated items from your credit report can be removed. We will discuss this a little further.
How much will your score improve if you remove the negative items?
It depends on two main factors: the length of your experience using credit and the severity of the negative element.
A long credit history will have less of an impact if only one negative item is reported. But a serious negative event like a write-off will indicate that you are now a high risk borrower and cause you to lose more points despite a long credit history. For those with a short credit history, also known as a “light file,” almost anything negative will cause the score to drop significantly. The higher the “thin” score at the start, the greater the drop.
But in credit scoring, sometimes it only takes a few points to take it to the next level. These points could make a huge difference in real dollars on your next loan or whether or not you are approved for your next credit card. So how can you remove items that shouldn’t be there?
How to remove credit report errors
Your first step will be to get copies of your credit reports from all three bureaus – Equifax, Experian, and TransUnion – and review them carefully.
You can get your reports for free at AnnualCreditReport.com. Look for accounts you don’t recognize. As you check your credit reports, you might be surprised at the number of accounts. Since your report lists negative information for seven years and positive information for much longer, you will likely see accounts, called trade lines, that you forgot, and maybe even some that you didn’t know you had yet.
Check account numbers, balances, and open and close dates. If you find any errors, you should carefully document them and communicate them in writing to the offices. Since credit bureaus don’t always have the exact same information about you on their credit reports, if you see an inaccuracy on a credit report, go through the dispute process and have it corrected.
But you might not be out of the woods. Other offices may have different inaccurate information. That’s why you need to get all three reports to make sure all of your information is correct.
If the same error appears on two or all three reports, you should only dispute it once. If the source of the information makes a change as a result of your dispute, that source should also notify the other offices of the change. But I recommend checking it out anyway.
Correcting all three reports is important because some lenders and businesses purchase a “three in one” report that includes a credit score and credit history information from each of the three bureaus. Each office has slightly different procedures for filing disputes, but all three allow you to dispute inaccurate or outdated information by phone, mail, or online:
- Equifax: Call the phone number provided for disputes on your credit report and make sure you have the 10-digit credit report confirmation number (on your report) available. You may also dispute by mail to Equifax Information Services LLC, PO Box 740256, Atlanta, GA 30374 (no confirmation number is required on written correspondence); or online.
- Experience : You can dispute over the phone using the toll-free number on your credit report; by mail to Experian, PO Box 9701, Allen, TX 75013; or online.
- TransUnion: You can dispute the information by telephone at (800) 916-8800; by mail to TransUnion Consumer Solutions, PO Box 2000, Chester, PA 19022-2000 (be sure to include the completed survey request form found on the website); or online.
File a dispute online
I used to recommend that you write (on paper) to initiate a dispute so that you can keep a paper trail. Today, when you dispute online, the bureaus provide confirmation throughout the process. Simply save or print documents along the way to establish a paper trail for future reference. Either way, be sure to document your interactions.
Disputing online is faster, easier, and more secure than doing so by mail, but you may need to be able to upload documents to support your dispute. Consider sending a letter with all of your ID, credit information, and other documents. How many people handle this letter and can be tempted to open it?
When you dispute online at Experian, for example, you choose which items you want to dispute with one click. You go through the process one step at a time. When you’re done, you submit the disputes and any documents you upload to support them. You can create a paper trail by printing the report, the “shopping cart” of the dispute, your documents and the confirmation free of charge.
Filing a dispute by mail
If you choose to dispute items on your credit report by mail, write a letter stating the item (s) you are disputing. Include all the facts that explain your case and include copies (not originals) of documents. Attach a copy of your credit report with the items in question circled or highlighted.
Make sure you provide your full name and address and tell the company what action you want (correction or deletion). Send your protest letter by registered mail, with acknowledgment of receipt, so that you can document that the letter was mailed and received. Keep copies of your dispute letter and attachments.
If there are changes as a result of your dispute, you can request that the office send correction notices to anyone who received your report in the past six months. If you have applied for a job, you can have a corrected copy of your report sent to anyone who has received a copy in the past two years for employment purposes.
At the end of the line
While working on the negative things that may be on your credit report, keep in mind the positive things you can do right now that will earn you a higher score over time. If you pay your bills on time, keep your credit usage low, and apply for new credit only when you need it, you’ll see your score increase over time.
Remember that the negatives fall off after seven years, but the positive information will stick around much longer. The more positive actions you can take, the better your score will be. Good luck!
Have a question about Steve’s credit rating? Drop him a line on the Ask Bankrate Experts page!