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Sometimes it’s amazing what you can find on your credit report. And often times you will find that many of the negative items on your report are incorrect, duplicated or, as I’ll show you, easily fixed. I had 13 negative items on my credit report and using the simple advice below have gotten it down to ONE negative item!

Your credit score is what banks and companies look at to determine if you are a risky candidate for a loan or service and a low credit score can seriously hold you back in life! Here’s a brief overview of what I did to get myself into credit card trouble, what my situation was, and how I fixed it. Please keep in mind this is simply what I did to clean up my credit report and by no means should be taken as financial advice. This is just what I did so take it “as is”. It worked for me though!

I departed for Australia in 2003 at the age of 25 and on 6 days notice. I’d committed to living there for a year and a half while I studied for my masters degree. This short notice and ill-planning meant I had little savings and even less time to prepare financially to cover all the expenses. Over the next 8 months I was forced to live primarily off my credit cards due to work limitations on my “Tourist” visa. When there’s nothing but money going out and none coming in you start to get into trouble. FAST!

When I returned to the US I was able to eventually pay off the balances on my credit cards but I was left with quite a few negative items and inquiries. (In fact some credit card companies had duplicated negative items!) Both of the preceding items can and will have a heavy impact on your credit score for the worse. Bad credit can drastically limit your participation in a multitude of life’s opportunities like affordable house ownership, car/truck/boat/motorcycle ownership, higher rates on any loans, etc etc.

The info in this article is worth knowing and looking into yourself. After all, you’re the only one responsible when it comes to what’s on your report or not. That being said, if you still have a lot of outstanding debts on credit cards or high interest rate loans it may be worth looking into companies that can help repair your credit for you or consolidate your outstanding debts. The credit repair method I will show you below below is simple but effective. It is good to know no matter what, but will be of greater assistance to those trying to clean up a credit report not those trying to solve massive debt problems.

Here’s what you need to do to remove late payment penalties from your credit report:

• Get a Free Copy of your Credit Report

It’s not well known but you can actually order a copy of your credit report free and without any strings attached. “The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.” Click Here, to learn more about this AND order your credit report directly from the Federal Trade Commission’s website. Do this first so you’ve got a copy of your report and can see what’s good and what’s not so good.

• Review Your Credit Report

This is the most confusing part but you can get through it pretty quick. The three main credit reporting agencies in the US are Experian, Transunion and Equifax and each has it’s own way of displaying their report. Regardless, they will all show you “positive items” (things that are helping your credit score) and “negative items” (things that are hurting your credit score.) Look for anything that lists what credit cards you’ve had in the past and any currently open credit card accounts you have. They will be separated into two categories “Positive” and “Negative”. When you see a negative item highlight which account it is and why it’s being listed as negative. (Often times it will say, 30 days late, 60 days late, etc) Look over every credit card listed and in each of the three reports, highlighting negative items as you go.

• Dispute!

So now what to do? Dispute those negative items! To keep it simple, here’s how I think of it. Say you had a credit card with XYZ and they are reporting to Experian that you were 60 days late paying them. But you don’t think you were ever late paying them. What you’re going to do is simply dispute that you were ever late and ask them to verify their information. Here’s where the cool part comes in. From the moment you first post your dispute, under the Fair Credit Reporting Act, Experian has 30 days to investigate your dispute and reply to you with their findings. If they cannot do so in 30 days the negative item you’ve disputed automatically comes off your credit report. Usually they do reply within 30 days but simply because they get tens of thousands of disputes EVERY DAY sometimes they can’t verify the item you’re disputing or can’t get to it in time and now you’ve now got one less negative item on your report! This being the case it’s imperative that you keep copies of the disputes you send in and when you send them!

Here’s what a typical dispute looks like:
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Your Address

Their address (I’ll give them to you below)

Date

Dear Sir/Madam:

This letter is a formal complaint that you are reporting inaccurate and incomplete credit information on my credit report. I also formally request a description of the procedures used to determine the accuracy of the disputed information below.

Can you you please investigate the following information and either remove the negative item from my report or at the very least send me the information that you used to add it to my report.

Place the credit card company name you’re disputing here and the last four digits of the account next to it.

Thank you,

Name

SSN#

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Like I said, it’s simple and you can use this basic formula to dispute anything you think unfair or inaccurate that’s on your report.

• Mail the Dispute

Now you should have three letters disputing negative items, one to each of the three credit reporting agencies. Mail them to the following address’s:

Experian - ATTN: Dispute Department. P.O. Box 2002. Allen, TX 75013

Transunion - ATTN: Dispute Department. P.O. Box 2000. Chester, PA 19022

Equifax - ATTN: Dispute Department. P.O. Box 105518. Atlanta, GA 30348

Remember to keep copies of each letter mailed as well as recording the date mailed. (I wrote it on my copy so I knew where it was.)

• What Next?

In a about a month you should receive a reply stating their findings and what action they took. The letter will also include another free copy of your credit report and any changes made. If they verify the item as accurate and therefore do NOT remove it from your report then wait a few weeks and write another letter to them. It can be basically the same as before, just ask them to re investigate. The key here is persistence! I’m not kidding you about this. On the first batch of disputes I sent out about 8 of the 13 negative items came off immediately! The remaining five I kept writing and disputing and within four months I was able to get all but one negative item off!

And lastly, If they don’t get back to you in 30 days or less write them another letter with a copy of the old one stating they failed to get back to you in 30 days or less and that under the Fair Credit Reporting Act the negative item disputed must be removed. Now in a perfect world this is exactly what happens, and usually it does. But what if they write you back and say, “No!”?

I’ve been asked by a few people, “What DO I do if they simply say “No!” and/or it remains on my credit report without any response?” and, “What if I have strong evidence that no matter what they are saying, I know and can prove the negative information they’re reporting is incorrect?” Well if this applies to you or you just want to learn more then you should read part two of this three part post.

Click Here to Read: Fix Your Credit Report II - How to Remove “Hard to Get Off” Negative Items

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