Your credit report is meant to be an accurate, detailed summary of your financial history — however, mistakes happen more often than you may think.
Whether it’s accounts that don’t actually belong to you or outdated derogatory information that’s still being reported, incorrect information could be bringing your score down unnecessarily.
Read on to learn how to remove erroneous information from your credit report — and some tips on how to handle those negative (but accurate) items that are dragging your score down.
Table of Contents
- How to remove negative items from your credit report
- Can I dispute accurate information from my credit report?
- Common credit report errors to look out for
- Impact of identity theft on your credit report
- COVID-19 and credit repair: What you should know
- How to remove items from your credit report FAQ
How to remove negative items from your credit report
First, it's important to know your rights when it comes to the information in your credit history.
Under the Fair Credit Reporting Act (FCRA), credit bureaus and lenders must ensure that the information they report is accurate and truthful.
This means that, if you find mistakes in your credit report, you have the legal right to dispute them. And, if the information disputed is found to be incomplete or erroneous, the bureaus are obligated to remove it from your record.
Some common credit report errors include payments wrongly labeled as late or closed accounts still listed as open. It's also possible for your report to include information from someone else, possibly someone with a similar name, Social Security number, or identifying information.
Bear in mind that correct information cannot be removed from your credit report. So, if your score is being dragged down by accurate negative information, you’ll need to repair your credit over time by ensuring you make payments on time and decrease your overall amount of debt.
Here are some tips to help you repair your credit history:
1. Get a free copy of your credit report
It’s important to check your credit report frequently — annually, if not more often — so you can catch any irregularities early on.
Under federal law, you have the right to obtain a free credit report from all three major credit bureaus (Equifax, Experian and TransUnion) once a year. However, because of the pandemic, all three bureaus are offering free weekly reports until April 2022.
You can request yours through AnnualCreditReport.com, the only free credit report website authorized by the federal government. Make sure to request and check your reports from all three bureaus since it’s not uncommon for each one to get different information from creditors and lenders.
You can also request them by:
Phone: (877) 322-8228
Mail: Download, print, and complete the request form and mail to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
In addition to your annual report, you can request additional free copies if:
- You were denied credit, insurance, or employment based on your credit in the past 60 days
- There are sudden changes in your credit limit or insurance coverage
- You’re receiving government benefits
- You're a victim of identity fraud
- You’re unemployed and/or will apply for employment within 60 days from the date of your request
Other ways to get your credit report
While you can get free reports from AnnualCreditReport.com, do keep in mind that these don’t include a credit score. In other words, if you’d like to monitor your FICO or Vantage scores, you’ll need to obtain your reports directly from the bureaus.
Each of the major bureaus offers credit monitoring services that include access to your report and your score, among other benefits.
Experian’s monitoring plan costs $24.99 a month, after a 30-day free trial period. The subscription includes daily updates, monthly reports and FICO scores. It also includes identity theft protection, fraud-resolution services and credit monitoring, which helps you spot any mistakes early on.
Equifax has three different service packages which range in price between $4.95 to $19.95 a month. The packages may include daily report updates, credit monitoring from one or all three bureaus (depending on the plan) and/or identity theft protection.
TransUnion’s plan costs $24.95 per month. It monitors credit scores from all three reporting bureaus in real time, alerts you if someone applies for credit using your name and features personalized tips to improve your score.
Experian and Equifax do have free subscriptions available. However, these don't include access to reports from competing bureaus and the information included is updated monthly (paid memberships usually feature daily updates).
2. File a dispute with the credit reporting agency
Once you have your report, make sure to look through each account and see if there are creditors you don’t recognize. It’s also important to check whether older derogatory items (over seven years after the original delinquency date) are still being reported.
If you do find errors in your reports, it’s time to initiate a dispute directly with the reporting bureau through its website or by mail. This will prompt an investigation on the bureau's part.
Bear in mind that you have to dispute the entry with each agency to make sure the removal is complete across the board.
How to file a dispute online
Each bureau — Equifax, Experian and TransUnion — has a section dedicated to walking consumers through the online dispute process. Once you create an account, you can file as many disputes as you need and check their status, for free.
How to file a dispute letter
You can also send a dispute letter to the bureaus, detailing any inaccuracies you've found in your credit file. When writing your letter, provide documentation that supports your claim and be precise about the information you are challenging. The Consumer Financial Protection Bureau (CFPB) recommends enclosing a copy of your report with the error circled or highlighted.
Depending on the information being disputed, these are some of the documents you can provide to help aid the investigation:
- Credit card or bank statements
- Copies of checks
- Letters from lenders certifying mistakes
- Pay stubs
- W-2 forms
- Utility bills
- Proof of identity (birth certificate, driver's license, passport, for example)
- Police reports (in the case of identity theft)
Mail the letter by certified mail and request a return receipt. This will certify that the reporting agency received the letter, and you will receive a signature as evidence. Keep the certified mail signature, along with copies of your letter and any enclosed documents.
Dispute letters should be mailed to:
Equifax Information Services, LLC
P.O. Box 740256
Atlanta, GA 30374
Include this dispute form with your letter.
P.O. Box 4500
Allen, TX 75013
TransUnion Consumer Solutions
Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016
Include this dispute form with your letter.
3. File a dispute directly with the creditor
You can also contact the company that provided the information to the bureau in the first place, such as a bank or credit card issuer. Once it receives a dispute, a lender is also required to investigate and respond to all disputes that might impact your score.
Remember to include as much documentation as possible to support your claim. It's also helpful to include a copy of your report marking the error.
The address you should mail the letter to is usually listed on your report, under the negative item you'd like to dispute. You can also contact the lender directly to verify the mailing address and the documents you should include.
If the lender finds that it was mistaken or cannot prove that the debt actually belongs to you, it will notify the bureau and ask it to update your file.
4. Review the claim results
Reporting agencies and lenders usually take around 30 days to investigate disputes. Once they make a decision, they must notify you within five days of completing their review. The notice will inform you if the disputed item was found to be inaccurate or not.
If the disputed information was, in fact, inaccurate, the bureau must update or delete the item. They should include a free copy of your file if the dispute results in a change.
If the bureau or lender considers the disputed information isn't a mistake, you can file an additional claim. Review your initial claim for any errors and correct those. If possible, you should include additional documents to support your request as this can help the bureau evaluate any data it might have missed the first time around.
5. Hire a credit repair service
Disputing errors can be a time-consuming process, especially if your history has several mistakes or if you were a victim of identity theft. Reputable credit repair companies — such as Credit Saint, Lexington Law or Sky Blue — may be viable solutions if your file is riddled with inaccuracies.
Credit repair services can help you dispute inaccurate negative information and handle creditor negotiations. However, if you decide to hire a credit repair agency, bear in mind that there are consumer protection laws regulating how they operate and what they can do. The Credit Repair Organizations Act (CROA) establishes the following regarding credit repair services:
- They cannot provide false or misleading information concerning a person’s credit status and identification
- They must provide a detailed description of the services they provide
- They cannot charge for their services until they has been completed (although most of them do charge a small initial work fee)
- There must be a written contract detailing the services they’ll provide, the time frame in which these services will be provided and the total cost for them
- They cannot promise to remove truthful information from your record before the term set by law (seven years for most derogatory items, ten years for some bankruptcies)
- You have three days in which to review the contract and cancel without penalty
Before signing up with one of these companies, it’s important to understand what they can and cannot do. For example, any company that promises to remove accurate negative items or create a new credit identity for you is most likely engaging in illegal practices or a scam.
Can I Dispute Accurate Information From My Credit Report?
Accurate items in your record can't be disputed or removed before the term set by law (seven years for most negative items). For example, if you missed payments on your credit card or defaulted on a student loan, your dispute request will be denied.
If you do have valid negative items on record, here are some things that might help:
1. Send a request for “goodwill deletion”
Writing a goodwill letter can be a viable option for people who are otherwise in good standing with creditors. If you've taken steps to pay down your overall debt and have been paying your monthly bills on time, you might be able to convince your creditor to “forgive” the late payment.
While there's no guarantee that the creditor will delete the derogatory information, this strategy does get results for some. Goodwill letters are most successful for one-off problems, such as a single missed payment. However, they are not effective for debtors with a history of late payments, defaults or collections.
When writing the letter:
- Take responsibility for the issue that lead to the derogatory mark
- Explain why you didn't pay the account
- If you can, point out good payment history before the incident
2. Work with a credit counseling agency
Several non-profit credit counseling organizations, like the National Foundation for Credit Counseling (NFCC), can help dispute inaccurate information on your record.
The NFCC can provide financial counseling, help review your credit history, help you create a budget and even a debt management plan free of charge. It also offers counseling for homeownership, bankruptcy and foreclosure prevention.
As always, be wary of companies that overpromise, make claims that are “too good to be true” and ask for payment before rendering services.
When looking for a legitimate credit counselor, the FTC advises consumers to check if they have any complaints with:
- Your state’s Attorney General
- Local consumer protection agencies
- The United States Trustee program
Are pay-for-delete negotiations worth it?
Pay-for-delete is a negotiation strategy in which you offer to pay your debt (partly or in full) in exchange for the collection agency to remove the derogatory item from your file. Since collection agencies want to get back as much money as possible, paying the debt may be enough incentive for them to remove the negative entry. However, pay-for-delete is not a dependable solution, and it falls in a legal gray area.
Collection agencies are required by law to report accurate information, just like reporting companies and creditors. While you can certainly request it, a collection agency has the right to refuse your request. They may agree to label the collection as paid — which is what happened — but they won't delete the collection entry itself.
Also, note that pay-for-delete agreements might not improve your score. The most recent credit score models (FICO 9 and VantageScore 4.0) don't factor in paid collection accounts when calculating your score, which means that fully paying the account will have the same effect as negotiating a pay-for-delete. However, bear in mind that unpaid collections will still impact your score.
Avoid the following strategies
While the following methods can be tempting options when trying to repair your credit, they can often cause more harm than good. Stay away from the following:
Closing a line of credit that is already behind on payments
Closing a card that’s behind on payments doesn't eliminate the debt. In fact, it can lower your credit score by increasing your debt-to-credit ratio, also known as credit utilization percentage. This ratio represents the amount of credit you're currently using divided by the total amount of credit you have available.
For example, if you have two credit cards, each with a maximum credit limit of $5,000, your total available credit is $10,000. Owing $3,000 on one card and $2,000 on the other would mean you're using 50% of your total available credit.
To improve your credit score, experts recommend keeping your credit utilization under 30%. Following the example mentioned above, that would mean using only $3,000 or less per cycle.
If you close one of your credit cards instead of paying it, you'll have less available credit. Creditors evaluate your debt-to-credit ratio when you apply for new cards or loans. If your ratio is over that threshold, they might classify you as a high-risk borrower, offer you less attractive interest rates or even deny you credit altogether.
Filing for bankruptcy
Bankruptcy should be considered a last resort — it can seriously damage your score and hinder your ability to get loans, mortgages or credit for years after your debts are discharged.
There are two types of bankruptcies available for individuals: Chapter 7 and Chapter 13. A third type, Chapter 11, is meant for businesses.
Under a Chapter 7 bankruptcy filing, a court mandates the liquidation of your assets in order to pay your outstanding debt. A trustee is then appointed to review your finances and sell off any additional asset that isn’t protected under bankruptcy exemptions.
With a Chapter 13 bankruptcy, on the other hand, you’re allowed to keep your assets as long as you complete a court-mandated repayment plan meant to pay your highest priority, secured debt.
Impact of bankruptcy on your credit report
Filing for bankruptcy can lower your score by around 200 points or more. It will also negatively impact your chances of getting new lines of credit or loans for several years until your credit history substantially improves.
If you file for Chapter 7 bankruptcy, the derogatory mark will remain on record for up to 10 years; for Chapter 13, it's seven years.
Common credit report errors to look out for
According to the Consumer Financial Protection Bureau, these are the most common errors consumers find on their credit history:
- Wrong name, address or phone number
- Accounts from someone with a similar name
- New credit accounts opened by someone who stole your identity
Incorrect account status
- Accounts wrongfully labeled as open, past due or delinquent
- Accounts that wrongfully listed you as the owner instead of authorized user
- Wrong date for the last payment received, date the account was opened or delinquency status
- Same debt listed multiple times
- Information that is not removed, despite already being disputed and corrected
- Accounts that are listed multiple times, with different creditors
- Incorrect current balance
- Incorrect credit limit
Negative credit report entries that impact your score the most
Most accurate negative items stay in your file for around seven years. Fortunately, their impact diminishes as time goes by, even if they are still listed on the report.
For example, a collection from a few years ago will carry less weight than a recent one — especially if there aren’t any new negative items in your history. Improving your debt management after receiving a derogatory mark can show lenders you're unlikely to repeat the issue and help increase your score.
These are the most common items that can lower your credit score:
Multiple hard inquiries
Multiple hard credit checks over a short amount of time are a red flag for lenders, as it tells them that you are applying for credit too often and, potentially, being denied.
However, there are some exceptions to this. For example, if you’re looking to buy a home and want to compare interest rates between several lenders, you can. FICO and VantageScore, the two most commonly used credit scoring models, give consumers a window of around 14 to 45 to compare rates — this is known as rate shopping. All credit inquiries done between this period of time will show up on your file as one item.
Payment history is perhaps the most influential factor when calculating credit scores. If you are late for several payment cycles or not paying at all, it will significantly hurt your score. Paying a few days late won't necessarily impact your score since creditors won’t notify the bureaus immediately. However, if you’re late 30 days or more, it will probably go on your record.
Foreclosure can also cause a credit score to drop substantially. According to FICO, a score can drop up to 100 points from a foreclosure, depending on the consumer’s starting score. Foreclosures stay on your record for seven years.
Charge-offs occur when a creditor has stopped expecting a debt to be paid. This can happen if a debt isn’t paid within 180 days — although some creditors could charge off a debt in as little as 90 days. Charge-offs can cause your credit score to drop 100 points or more.
Repossessions can lower your score by around 100 points or more, mainly due to the series of missed payments that lead up to it.
If a collection agency or debtor sues you for payment, a court might issue a judgment against you, mandating that you pay the debt in addition to other fees and attorney costs. The impact from a judgment can vary, but it could lower your score by more than 100 points.
A collection occurs when the original creditor hires an outside firm to collect payment. These fall under payment history, and can easily knock off more than 100 points from your score.
What makes up your credit score?
Your credit score is calculated using different scoring models, such as the VantageScore and FICO. These are the two most widely used credit-scoring models, and each has its own proprietary metrics and criteria. However, both models have one thing in common: they use data from the major credit reporting agencies to generate your score.
If you want to repair bad credit, it's important to understand what factors VantageScore and FICO evaluate when generating scores.
VantageScore 4.0 Scoring Model
VantageScore prioritizes total credit usage, balance and available credit. Basically, the model first evaluates the amount of credit you have available to use and how much of it you're using. Using 30% or more of your available credit can lower your score since lenders usually consider it a red flag.
Other factors considered include your credit mix, payment history, credit history length and new accounts.
FICO Scoring Model
The FICO score is the industry standard — it’s the oldest credit scoring model and what most lenders use to evaluate a person's creditworthiness. FICO's scoring has five categories, each with a percentage value indicating how much weight they place on each:
- Payment history (35%): Your payment history includes both on-time and late payments, collections, as well as record of bankruptcy or repossessions — if any.
- Amounts owed (30%): This factor considers how much you owe on your cards and loans. It also evaluates how much of your available credit you're using every month.
- Length of your credit history (15%): The length, or age, of your history is usually estimated based on how long you've had your oldest account, when you opened the newest one and how long it's been since you last used your active accounts.
- Credit mix (10%): Credit mix refers to the types of accounts included in your report — like credit cards, installment loans and mortgage loans. Having different accounts in good standing can help boost your score. However, it's entirely possible to have only one type on record and have an excellent score.
- New credit (10%): Recent credit inquiries and recently opened accounts can lower your score by a few points, but not for a long time.
Impact of identity theft on your credit report
Identity theft — when someone steals your personal information and uses it to open new financial accounts — can wreak havoc on your credit. These new accounts show up on your credit record and hurt your score, especially if they’re delinquent or if the identity thief applied for several in a short amount of time.
Cleaning up your credit after identity theft can take anywhere from several months to years. The longer it takes you to realize someone stole your identity, the more difficult it will be to undo the damage. This is why keeping a close eye on your report and learning how to protect yourself from identity theft will help you to keep your information safe.
How to remove negative items related to identity theft
If you believe you’ve been a victim of identity fraud, file a dispute with the Federal Trade Commission (FTC) online at IdentityTheft.gov or by phone at 1-877-438-4338. You should also file a police report.
To prevent further damage to your credit history, these are the steps you should take:
- Notify the incident to Transunion, Experian and Equifax through phone or mail
- Place a security freeze and fraud alert on your credit report
- Request a copy of your credit report through AnnualCreditReport.com
- Look out for unauthorized transactions or new accounts that don’t belong to you
- Contact creditors to close compromised accounts
- Consider subscribing to an identity theft protection or credit monitoring service
COVID-19 and credit repair: What you should know
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided consumers with some debt and credit relief measures.
While original creditors and debt collectors can still report negative items, lenders have put some measures in place to help consumers avoid delays in their payments. These include:
- Payment plans
- Mortgage forbearance
- Deferred payments
- Loan modifications
- Reduced interest rates
- Loan extensions
- Waiving late fees
You must apply for one of these directly with your lender and, if accepted, your accounts won’t reflect any new negative information.
Additionally, as we said above, at least until April 20, 2022, Experian, Equifax and TransUnion will offer free weekly reports through AnnualCreditReport.com, which can help you monitor and protect your personal finances throughout the pandemic.