How to Clear Your Personal Credit Report

Your credit report is the only way many people making important decisions about your finances, employment, and insurance will ever know you. You’ve probably heard it said, “You only have one chance to make a good first impression.” And especially in the case of your credit report, it’s true.

There are many companies that claim they will repair your credit. There is no need to pay someone else to do the job that you can accomplish all on your own. Since it is your own credit report you’re working on improving, you might be a little more motivated to clear up any dents and dings that might be appearing.

The Ugly Truth
The first step to clearing your credit is to take a deep breath and check a copy of your credit report. Most people find their credit is not as bad as they anticipated. There are three main credit bureau companies that provide consumer credit reports and since they are competitors, they won’t have the same exact information. Therefore, you need to get a copy of your personal report from each one.

Here are the points of contact for each bureau:

Equifax P.O. Box 740241 Atlanta, GA 30374-0241 http://www.equifax.com.
TRW/Experian P.O. Box 2104 Allen, TX 75013-2104 http://www.experian.com.
TransUnion P.O. Box 1000 Chester, PA 19022 http://www.transunion.com

Additionally, consumers are entitled to a free credit report from each of the credit bureaus once per calendar year that can be requested from the following website: http://www.annualcreditreport.com.

When you receive a copy of your report, check it carefully from top to bottom. Verify each entry from your name and address, to each and every creditor listed on your report is absolutely correct. The bureaus only report the information they receive from creditors, so it is not an exact science and mistakes do happen. Make a list of anything you deem inaccurate.

First Steps
Take your list and for each of the three credit bureaus, fill out the following information: Date, First Name, Middle Name, Last Name, Maiden Name, Suffix, Current Address, City, State, Zip, Social Security Number, Date of Birth, Information to Dispute.

For each credit entry you are disputing provide the following information: Creditor, Account Number, Reason for Dispute. When you are finished, sign and mail the form to the appropriate credit bureaus along with copies of any pertinent paperwork you may have for example, a copy of a cancelled check proving an account was paid in full or a copy of your divorce decree showing an account is the responsibility of the ex-spouse (although many creditors will hold to the fact if the account was opened jointly, it will remain joint until it is paid in full and closed). Keep a copy for your own records.
Remember,all information on your credit report must be verified in order to be reported. If you have a collection account showing that you do not recall having or cannot identify, file a dispute and have the item verified. It may not be your account at all. If the item cannot be verified, it cannot be reported. If you had extenuating circumstances that resulted in you falling behind on your financial obligations, each bureau allows you to put a consumer statement on your report telling your side of the story. Keep it factual and brief if you use this service.

Handling Those Dents and Dings
When you receive your copy of your credit reports back from each of the bureaus. Again, look it over carefully. Make sure any name, address, or employer changes you requested were made. Also, check your creditors to be certain the information you disputed was either verified and reported correctly, or removed. If you have existing collection accounts, now is the time to handle them. If your account has been turned over to a collection agency, deal directly with the agency. Many creditors sell their accounts to these agencies for cents on the dollar so you have a negotiating point. Contact the agency and offer to pay off the account at a settlement rate in exchange for deletion from your credit bureau. Some agencies will do this, some will not. If they won’t agree to delete it from your credit report, ask if they can simply show it as an unrated paid item. Once again, some agencies will help you in this matter, others will not. It never hurts to ask. Whatever your agreement with the agency, I cannot stress enough to get it in writing before you pay.

If you have several collection accounts, try to pay off or negotiate settlements on the small ones first. It will give you a sense of accomplishment and you won’t feel like you’re fighting a huge monster that can’t be tamed. Remember, your credit didn’t get those dents and dings overnight and it will take a little time to repair, but it can be done. Make payment arrangements if you need to on the larger accounts and ask that your account be reported as “Collections but paying”; until the account is paid in full. When you have done all you can, send a copy of your changes to each of the credit bureaus. The creditors are supposed to update the bureaus, but sometimes it doesn’t happen.

And, as with all things, if you do it yourself then you know it was done right!