How to Clean Up Your Credit Report
To clean up your credit report, start by obtaining a copy from each of the three major credit bureaus and carefully review them for any errors or inaccuracies. Dispute any incorrect information with the credit bureaus and provide supporting documentation if necessary. In the meantime, focus building good credit history by paying off outstanding debts, making timely payments, and keeping credit card balances low to improve your credit over time.
Not checking your credit regularly can be a critical financial mistake. You might have negative items—inaccurate or otherwise—dragging down your score. That can result in problems getting financing, service through insurance or utility companies, or even a job. And if you are able to get approved for a loan or a credit card, your interest rate and other terms could be less than desirable if your credit isn’t good enough.
Here are seven tips for cleaning up your credit report to potentially bring up your score and open financial doors in the future:
- Pull Your Credit Reports
- Go Through Your Credit Reports Line by Line
- Challenge Any Errors
- Get Past-Due Accounts Off Your Report
- Lower Your Credit Utilization Ratio
- Take Care of Outstanding Collections
- Repeat Steps 1–6
How to Clean Up Your Credit Report
Whether you have errors on your report or not, you do have some options for cleaning up your credit report and possibly improving your credit score.
1. Pull Your Credit Reports
Under the Fair Credit Reporting Act, you’re entitled to one free credit report every year from each of the three major credit reporting bureaus: Equifax, Experian, and TransUnion. If you rotate through the bureaus, that means you can get a free credit report once every four months, helping you be aware of any issues or problems that need to be dealt with in a timely manner. (You can get your reports free weekly for a limited time.)
When you pull your free credit report, you don’t see your credit score. A free Credit.com account will show you your Experian VantageScore 3.0, as well as a detailed credit report card that outlines what is affecting your score. And if you want even more information about your credit on a regular basis, consider signing up for ExtraCredit®. This paid tool allows you to pull your credit reports from all three credit bureaus and get regular views of 28 of your FICO® scores to understand exactly what’s going on with your credit.
2. Go Through Your Credit Reports Line by Line
It can be tedious work, especially if you have a long credit history, but it’s important to thoroughly check your credit report each time you pull it. Check loan statuses, account balances, your payment history, the list of recent credit inquiries, and anything else on the report for accuracy.
You should also pay attention to your personal information even though it doesn’t directly affect your score. Unfamiliar line items, such as a wrong address or an incorrect birth date, could be a warning sign of identity theft.
3. Challenge Any Errors
If you find something reported incorrectly on your credit report, you can challenge the error by filing a formal dispute with the bureaus. Be sure to include any supporting documentation when you file your dispute.
Sometimes you need a little help getting your credit score back on the right track and working with credit repair services can be a big help. Services such as Lexington Law and CreditRepair.com can help you identify main issues with your credit and assist you in challenging the accuracy of errors.
Disclosure: Credit.com and CreditRepair.com are both owned by the same company, Progrexion Holdings Inc. John C Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.]
4. Try to Get Past-Due Accounts Off Your Report
If you have a past-due account listed on your report, it might be possible to get the creditor to remove it. You can ask the creditor to forgive the past-due payment and remove the item from your credit report with a goodwill letter.
This usually works only if you were late just one time after a long history of on-time payments and have made your payments as scheduled since. The creditor is also under no obligation to forgive past-due payments, but some will if you’ve been a good customer and ask nicely.
5. Lower Your Credit Utilization Ratio
Your credit utilization ratio is the ratio of how much credit you’re using to how much you have available. In general, the lower this ratio, the better. Using too much of your available credit indicates you might be relying too heavily on credit cards for daily living expenses, which makes you a bigger credit risk and lowers your credit score.
Lower your credit utilization ratio by paying off large balances and not adding any additional debt. You can do this a number of ways. One option is to apply for a balance transfer card with a 0% introductory APR. You can transfer existing balances to this card and potentially pay them off—and reduce your credit utilization ratio—much faster because you aren’t accruing interest.
6. Take Care of Outstanding Collections
Collections can hit your credit score hard. Paying off collections typically won’t remove them from your credit report. However, some credit scoring models, including newer FICO score models, treat paid collections with less weight than unpaid collections. Some of the newest models actually ignore certain paid collections. Potential creditors might also see that you paid what you owed and be more willing to lend you money in the future.
7. Repeat Steps 1 Through 6 Periodically
Once you clean up your report, your job isn’t done. Future errors, mistakes, or identity theft could send your score plummeting again. To help ensure that doesn’t happen, regularly review your score and report using a service such as ExtraCredit. If you see issues, take care of them as soon as possible.
How Can You Clean Your Credit Report Fast?
One of the fastest ways to clean up your credit report is to challenge the accuracy of information. If you’re able to prove something is inaccurate, the credit bureau must take action to remove or correct it.
Otherwise, cleaning up credit missteps you made in the past can take time. Getting any accounts you owe out of delinquency or collections can be one way to clean up your report. However, most negative information takes around seven or more years to age completely off your credit reports, and certain bankruptcies can take up to 10 years. It’s definitely more of a marathon than a sprint.
How Do You Get Things Removed from Your Credit Report?
To get something removed from your credit report, you have to either talk with the lender or creditor directly or file a request for investigation with the credit bureau. It’s important to understand that unless something is inaccurate, neither party is required to remove information. A fair and accurate credit report includes negative information as well as positive information.
Can You Raise Your Score in 30 Days?
Potentially. One fast way to potentially rebuild credit is to pay off high credit card balances. Creditors report your balances about once a month, usually around your statement billing date. Those balances heavily influence your credit utilization ratio, which is the second most important factor when it comes to most credit scores. If you can get your balances under 30% of their limits, you could see an improvement quickly.
It’s also a good idea to look for other things that might be affecting your credit score. Understanding what can cause your score to drop lets you find those issues on your report and work to correct them.
Getting a rapid rescore can also help you boost your credit if you’re applying for a mortgage. This is a fee-based service you might be able to access through a mortgage broker or lender, so talk to your mortgage professional about your options.
How Else Can You Get a Fresh Start on Your Credit?
The effects of negative information on your credit scores lessen over time. As you wait for your credit score to rebound, the best way to get a fresh start is to concentrate on establishing smart financial habits now.
Pay off credit card balances and work to keep them down. Review your budget to look for extra dollars that could be put toward paying down your debts. You can also look into taking out a secured credit card or credit-builder loan to reestablish a good payment history.
Disclosure: Credit.com and CreditRepair.com are both owned by Progrexion Holdings Inc. John C Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.