How to Clean Up Your Credit Report
Clean up your credit report so you can get the loans you need.
To clean up your credit report, you'll need to order copies of your report from the three major credit bureaus, review the reports for inaccuracies or old information, and then ask the credit bureaus to correct the information.
How to Get a Copy of Your Credit Report
The three major credit reporting companies are Equifax, TransUnion, and Experian. You should order your report from all three, as they often contain different information. To order directly from one of these credit bureaus, visit its website.
Equifax
www.equifax.com
TransUnion LLC
www.transunion.com
Experian
www.experian.com
Free Reports
You can get one free credit report each year from each of the three major credit reporting companies. To order your free report, go to www.annualcreditreport.com or call 877-322-8228.
You are entitled to an additional free copy of your credit report each year if:
- You've been denied credit because of information in your credit report.
- You're unemployed and looking for work.
- You receive public assistance.
- You believe your file contains errors due to fraud or identity theft.
- You've been denied employment (or another adverse employment decision has been made) based at least in part on information contained in a credit report.
In some states, you can get additional free reports even if you don't meet one of the above conditions. To learn more, see Nolo's article Credit Report Basics.
Credit Reports for a Fee
If you do not qualify for a free report (for example, if you have already ordered your free report for the year), you'll pay a $10 fee or less (depending on your state requirements).
Information Required to Order Your Report
When you request your credit report, you must provide your name, address, Social Security number, and date of birth. If you moved in the last two years, you may also have to provide your previous address.
To confirm your identity, you may also be required to provide information that only you would know. So be prepared to answer questions about your previous addresses or the amount of your monthly mortgage payment.
After you get your credit report, read through it carefully and start correcting.
Out-of-Date Information
As you read through your report, make a list of everything that's out of date. The following old information should not appear in your credit report:
- adverse information that's more than seven years old, including lawsuits, judgments, paid tax liens, accounts sent to collection, criminal records (except criminal convictions, which may be reported indefinitely), late payments, and overdue child support
- bankruptcies reported more than ten years after the date of the last activity (usually the date you received your discharge or the date the case was dismissed, although credit bureaus sometimes start counting from the earlier date of filing), and
- credit inquiries (requests by companies for a copy of your report) that are more than two years old.
Note that some adverse information regarding U.S. government insured or guaranteed student loans, or national direct student loans, may be reported for more than seven years.
Inaccurate Information
Next, look for incorrect information, such as:
- incorrect or incomplete name, address, phone number, birthdate, Social Security number, or employment information
- bankruptcies not identified by their specific chapter number
- accounts that are not yours or lawsuits in which you were not involved
- incorrect account histories, such as a history of late payments when you paid on time
- any closed accounts that are listed as open it may look as if you have too much open credit, and
- any account you closed that doesn't say "closed by consumer."
Request Removal of Bad Information
After reviewing your report, complete the form the credit bureau provided to dispute entries in your report. List each incorrect or out-of-date item and explain exactly what is wrong. Once the credit bureau receives your request, it must investigate the items you dispute and contact you within 30 days. If you let the bureau know that you're trying to obtain a mortgage or car loan, it can often do a rush investigation.
If you are right (that the information is inaccurate or incomplete), or if the creditor who provided the information can no longer verify it, the credit bureau must remove the information from your report or modify it based on the results of the investigation. Sometimes credit bureaus will remove an item on request without an investigation if rechecking the item is more bother than it's worth.
What to Do If the Credit Bureau Disagrees
If the credit bureau responds that the information is correct, contact the bureau directly to discuss the problem.
If you don't get anywhere with the credit bureau, ask the creditor to tell the credit bureau to remove the information. Write to the customer service department, vice president of marketing, and president or CEO. If the information was reported by a collection agency, send the agency a copy of your letter too.
By law, creditors cannot ignore information they know contradicts information in their file, and cannot report incorrect information when they learn that it is, in fact, incorrect.
If you feel a credit bureau is wrongfully including information in your report, or you want to explain a particular entry, you have the right to put a brief statement in your report. The credit bureau must give a copy of your statement or a summary to anyone who requests your report. Be clear and concise.
How to Rebuild Your Credit
After you've cleaned up your credit report, work towards getting positive payment information into your record.
- Get a credit card if you no longer have one.
- If your credit score is too low to qualify for a regular credit card, get a secured credit card by paying a deposit of a few hundred dollars. After you've paid on time for six months to a year, you'll be able to get a regular credit card. To learn about credit scores, see Nolo's article Credit Scoring.
It usually takes about two years to rebuild your credit so that you won't be turned down for a major credit card or loan. After four years or so, you should be able to qualify for a mortgage. For more information on rebuilding your credit, see Nolo's article Don't Use a Credit Repair Clinic.
Next Step
For detailed information on how to clean your credit report, including dozens of forms and letters on CD-ROM to help you repair your credit as easily as possible, get Nolo's Credit Repair, by Robin Leonard and John Lamb.