How To Clean Up Your Credit Report Yourself

You can take effective ways to clean up your credit, no matter how tarnished it is. There are specific things you can do as a borrower, but other tasks require analytical savvy and you should seek the expertise of professionals. To give your credit its erstwhile polish, first determine your total debt and compare that amount to what lenders are reporting to the credit agencies. Then identify and fix potential errors, making sure you reach out to the right people. You may even wish to review our list of the best credit repair companies if you do decide to get professional help.

As a borrower, you have rights and duties, so make sure to contact professionals like lawyers and debt consolidation specialists, among others, to determine what options are available to you. Once you clean up your credit, you can effectively control it by monitoring your credit profile continually and knowing your rights under the Fair Credit Reporting Act.

How Do I Determine My Total Debts?

To calculate your total debt, use an Excel spreadsheet or other type of template and list things like the lender, amount owed, average interest payment and type of debt. Also indicate the monthly payment and outstanding balance. You can use an online resource like the free debt management tool provided by the nonprofit InCharge Debt Solutions. You can also contact your bank account manager and ask him or her whether the bank has a tool to calculate and track personal debts. Go through your bills to determine your total debt payments. Also, pore over your bank statements to figure out those loans you pay electronically and for which the lenders don’t send regular paper bills.

How Do I Know What’s On My Credit Report?

By law, you have the right to receive a free copy of your credit report every 12 months as long as you remain a U.S. citizen or legal resident and have sent a specific request to the credit agencies. Contact one of the top credit reporting agencies and request your free credit report – it’s called “free statutory annual credit file disclosure,” and the Fair and Accurate Credit Transactions Act (FACT Act) mandates that each agency grant your request. Remember that you can place a request via phone, online and by mail.

Are There Effective, Quick Ways to Fix Errors on My Credit Report?

There are two steps in disputing and fixing errors on your credit report.

First, send a letter to the credit reporting agency, indicating what information you think is incorrect. Provide any supporting documentation, such as bank statements, debt-release paperwork, and correspondence you’ve had with lenders. In the letter, clearly state your name, address and each item you dispute. Use bullet points and break down each dispute by using words like “what,” “who,” “when” and “how much.” For example, if you disagree with the amount owed on a credit card account, clearly state what the dispute is about, who the lender is, when the item under dispute originated, and how much money you think you don’t owe. Send your letter by certified mail, return receipt requested, so you have proof it was delivered, who signed for it, and when it was delivered.

The credit reporting agency would investigate your claim, notify the other two agencies, and contact the respective service providers. It will contact you within 30 to 60 days, and if your claim is valid, it will send notices of correction to various parties – such as lenders, credit agencies, insurers, companies that may have denied you employment based on your credit report, and landlords.

The second step in disputing credit errors is sending a letter to the reporting lender or institution. Use the same approach and detail level you used when sending correspondence to the credit reporting agencies. Contact the lender to determine the best and quickest way to file a dispute. Service providers typically allow customers to file disputes over the phone, online and via mail.

After receiving your dispute, the lender will investigate it and notify you within 30 to 60 days. The creditor also will notify the credit reporting agencies of the pending dispute. If the lender finds that your claim is accurate – that is, you don’t owe anything or not as much as reported – it will not report that debt again.

Who Can I Talk to for Help?

Contact your state or local consumer affairs bureau and ask them about resources available in areas like debt management, credit cleanup, credit correction, and debt counseling.

You can also contact, and file a complaint with, the Federal Trade Commission, the agency in charge of promoting consumer protection and eliminating anti-competitive business and lending practices.

Seek the help of a nonprofit specializing in credit counseling; alternatively, you can reach out to a for-profit debt management company. Contact your state’s Department of Financial Services or the Better Business Bureau’s local branch in your residence area. Give priority to debt organizations that are registered with state officials and the BBB.

Get legal representation, especially if the amount under dispute is substantial. Seek a lawyer who is familiar with the intricacies of debt management and has covered cases of credit cleanup in the past.

What Are My Rights?

As a consumer, you have several rights under the Fair Credit Reporting Act. For example, if a company uses credit information against in an insurance, employment or credit decision, you must be notified. The same requirement applies if the credit reporting agencies discover and/or fix inaccurate data in your credit report. You also have the right to know your credit report’s contents. Other restrictions touch on how much and what others can see in your credit file, the fact that your consent is required before certain disclosures, and your right to sue someone who violates the law by accessing your file and using its contents without your approval.

Summary

You can clean up your credit and gradually control it if you know your rights and talk to the right people, especially those versed in the subtleties of debt management, settlement and consolidation. To make the cleanup effort a success, you should also know what is in your credit report and fix whatever inaccuracies it might contain.
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