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While it is impossible to remove correct items from your credit report, there are negative items you must eliminate. These incorrect items can negatively affect your credit report score. Therefore, it is very important to know how to eliminate negative items from your credit report.
Eliminating credit report errors are very useful if you plan on applying for a loan or mortgage. It is even quite possible to rectify mistakes of over five years from your credit history. There are various ways to deal with these errors, irrespective of the situation you encounter.
We have decided to provide you with the best ways to remove incorrect items from your credit reports.
How to Eliminate Negative things from your credit Report
Here are some of the ways to eliminate negative items from your credit report:
Examine Credit Report for Errors
The first thing to do before taking any further step is to examine your negative entry. This is to ensure that your credit report does not contain any incorrect information whatsoever.
All you have to do in this case is to try and spot any possible incorrect detail. Your credit report is likely filled with a few errors whether or not your entry is valid. Therefore, the first step is to cross-examine your credit report along with the correct details already recorded.
Some of the items we advise you to examine for errors are:
Account number
Status of Account
Credit Limit
Date of entry
Status of Payment(e.g. Late payments)
Balance
Collections
Foreclosures
Any other important detail that might be incorrect
It is essential to note these corrections alongside the incorrect data input in the entry. This initial step is the best way to begin the process of eliminating negative items from your credit report. The errors spotted will be useful in the next steps.
Send in a dispute letter to the credit report Agency
Another important step to take is to notify the credit bureau through a dispute letter. You will compose this dispute letter to make the reporting aware of the negative items contained in your credit report.
All credit bureaus report to the Federal Credit Reporting Act (FRCA). This body expects all the provided information gotten from credit bureaus to be accurate and error-free. Therefore, you should notify the credit bureaus of your negative entry to avoid further complications.
You can have your dispute letter sent to the credit bureau via their websites or an email. TransUnion, Equifax and Experian are the main Credit bureaus you can contact. You must ensure that your letter is specific and addresses the situation you are facing.
It is best to send your letter to all three credit bureaus to ensure the removal of your negative entry. Once the credit bureaus receive and acknowledge your dispute letter, they will screen the negative entry and rectify it for you.
Debt Settlement
Sometimes it is difficult for credit bureaus to dispute every negative entry, which may lead you to consider other options. If you cannot dispute your negative entry for whatever reason, you would have to negotiate a "pay for delete" deal with the creditor.
This deal means you’d have to offer a payment to the creditor to remove the negative entry from your credit report completely. There must be an agreement in place before any payment is made to the creditor or collection agency. You must also have this pay-for-delete agreement put down in written form.
Working out pay for delete deal with the creditor or collection agency is best done over the phone. Direct communication and negotiations are fostered through such phone calls. However, make sure you have an agreement in writing as evidence of payment for the deal.
Benefits of Debt Settlement
Negative items on your credit report can negatively impact your credit score. Credit bureaus cannot always confirm every detail of the negative entry, so it is often removed. This removal could affect your credit score. This is why Debt settlement deals are one of the best options to eliminate negative items from your credit report.
Some of the benefits include:
Swift response
Creditors and collection agencies are often quick to respond to remove negative entries on your credit report. It is easier and faster to get in touch with them than credit bureaus through just a phone call.
Elimination of accurate items
Certain collection agencies can remove items that the credit reporting agency finds invalid.
Disadvantages of Debt settlement
While debt settlement has its positives, there are also some setbacks you should know.
In some situations, creditors might not be able to delete every negative item on the credit report. While they may delete the account in collection, the error from the primary creditor would still be visible on the credit report.
For instance, if there is a negative item from the original creditor on the non-payment of a car loan. This item will likely still appear on the credit report. So, at times there is a bit of limitation to what creditors can eliminate.
Also, collection agencies often receive many requests to remove negative items from credit reports. These loads of requests might leave some negative entries unattended. This is why we advise you to have an agreement in place and in the form of writing as proof of payment.
Other methods of removing negative items include:
Seeking Assistance from a Credit Counseling Agency
These are non-profit credit counselling institutions that render similar services as credit bureaus. They can assist with disputing incorrect details found on your credit report. The National Foundation for Credit Counseling (NFCC) is an example of a credit counselling agency.
Get a Credit Repair Professional
If you are not satisfied with any of the mentioned options, you can hire a credit repair professional. Some experts can remove negative items from your credit reports. However, this method can often prove to be expensive.
Draft a goodwill letter
Drafting a goodwill letter is similar to the pay-for-delete deal but with a lower probability rate of response. This method is best used when you are working on deleting paid collections or late payments. You will need to write a "goodwill letter" stating your situation and what negative entry you want to rectify.
However, you must keep in mind that the chances of a positive response are quite low.
Common Negative items on Credit Reports
Based on the analysis of credit bureaus, these are the frequently spotted negative items found on credit reports.
Incorrect name, telephone number, address and other information
Identity theft from external accounts
Inaccurate credit limit
Inaccurate current balance
Multiple appearances of accounts with dissimilar creditors
Inaccurate payment status and dates
Repeated debts in various lists
Mixed up and wrong identities
FAQs
What method is the best for removing negative items?
There are various ways for eliminating inaccurate information from credit scores. Debt settlement is one of the best methods available if you have issues disputing a credit report.
How do I dispute a credit report?
The process is quite simple. All you need to know is to draft a dispute letter to the credit bureau highlighting and explaining the incorrect details. You should receive a response within 30 days to your request.
Do removed negative items increase my credit score?
The item removed determines the effect it would have on your credit score. Some deleted items can either have little or much impact on your credit score.
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Instructions Below:
GOOGLE INCOGNITO MODE CREDIT TRICK For this, to work, you simply need to go into incognito mode on your computer and then go to the website for one of these businesses listed below. - Sign up for their email subscriber/offer newsletter. - Add a few items to your cart total of $200 or so. - Continue to browse and then go to checkout and checkout as a guest - Enter your information, make sure that the address matches your address on your credit report as well as all your personal information. - This will result in a soft pull approval of any of the credit cards below. - This mostly works with cards issued by Commenity and a few others so experiment and have some fun. If it does not pop up with the offer then try again or try a different website. I have seen many successes. 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HOW TO FREEZE Transunion https://www.transunion.com/credit-freeze Experian https://www.experian.com/freeze/center.html Equifax https://www.equifax.com/personal/credit-report-services/credit-freeze/ 1. Find Out When Your Issuer Reports Payment History 2. Pay Down Debt Strategically 3. Pay Twice a Month 4. Raise Your Credit Limits 5. Mix It Up How long will it take to increase your credit score? It won’t happen instantly, but if you follow the steps your credit score will begin to go up within a couple of months typically. 1. Find Out When Your Issuer Reports Payment History Call your credit card issuer and ask when your balance gets reported to the credit bureaus or check on ScoreMaster which is available through smartcredit.com/mrthen. That day is often the closing date (or the last day of the billing cycle) on your account. Note that this is different from the “due date” on your statement. There’s something called a “credit utilization ratio.” This is the amount of credit you’ve used compared to the amount of credit you have available. You have a ratio for your overall credit card use as well as for each credit card. It’s best to have a ratio — overall and on individual cards — of less than 30%. But here’s an insider tip: To boost your score even quicker, keep your credit utilization ratio under 10%. Here’s an example of how the utilization ratio is calculated: Let’s say you have two credit cards. Card A has a $6,000 credit limit and a $2,500 balance. Card B has a $10,000 limit and you have a $1,000 balance on it. This is your utilization ratio per card: Card A = 42% (2,500/6,000 = .416, or 42%), which is too high. Card B = 10% (1,000/10,000 = .100, or 10%), which is awesome. This is your overall credit utilization ratio: 22% (3,500/16,000 = 0.218), which is very good. But here’s the problem. Even if you pay your balance off every month (and you should), if your payment is received after the reporting date, your reported balance could be high — and that negatively impacts your score because your ratio appears inflated. So, pay your bill just before the closing date. That way, your reported balance will be low or even zero. The FICO method will then use the lower balance to calculate your score. This lowers your utilization ratio and boosts your score. 2. Pay Down Debt Strategically Okay, let’s build on what you just learned about utilization ratios. In the above example, you have balances on more than one card. Note that Card A has a 42% ratio, which is high, and Card B has a wonderfully low 10% ratio. Since the FICO score also looks at each card’s ratio, you can bump up your score by paying down the card with the higher balance. In the example above, pay down the balance on Card A to about $1,500 and your new ratio for Card A is 25% (1,500/6,000 = .25). Much better! 3. Pay Twice a Month Let’s say you’ve had a rough couple of months with your finances. Maybe you needed to rebuild your deck (raising my hand) or get a new fridge. If you put big items on a credit card to get the rewards, it can temporarily throw your utilization ratio (and your credit score) out of whack. You know that call you made to get the closing date? Make a payment two weeks before the closing date and then make another payment just before the closing date. This, of course, assumes you have the money to pay off your big expense by the end of the month. By the way, don’t use a credit card for a big bill if you plan to carry a balance. The compound interest will create an ugly pile of debt pretty quickly. Credit cards should never be used as a long-term loan unless you have a card with a zero percent introductory APR on purchases. Even then, you have to be mindful of the balance on the card and make sure you can pay the bill off before the intro period ends. 4. Raise Your Credit Limits Now, if you tend to have problems with overspending, don’t try this. The goal is to raise your credit limit on one or more cards so that your utilization ratio goes down. But, again, this only works out in your favor if you don’t feel compelled to use the newly available credit. I also don’t recommend trying this if you have missed payments with the issuer or have a downward-trending score. The issuer could see your request for a credit limit increase as a sign that you’re about to have a financial crisis and need the extra credit. I’ve actually seen this result in a decrease in credit limits. So, be sure your situation looks stable before you ask for an increase. That said, as long as you’ve been a great customer and your score is reasonably healthy, this is a good strategy to try. All you have to do is call your credit card company and ask for an increase to your credit limit. Have an amount in mind before you call. Make that amount a little higher than what you want in case they feel the need to negotiate. Remember the example in #1? Card A has a $6,000 limit and you have a $2,500 balance on it. That’s a 42% utilization ratio (2,500/6,000 = .416, or 42%). If your limit goes up to $8,500, then your new ratio is a more pleasing 29% (2,500/8,500 = .294, or 29%). The higher the limit, the lower your ratio will be and this helps your score. 5. Mix It Up A few years back, I realized I didn’t have much of a mix of credit. I have credit cards with low utilization ratios and a mortgage, but I hadn’t paid off an installment loan for a couple of decades. I wanted to raise my score a nudge, so I decided to get a car loan at a very low rate. I spent a year paying it off just to get a mix in my credit. At first, my score went down a little, but after about six months, my score started increasing. Your credit mix is only 10% of your FICO score, but sometimes that little bit can bump you up from good credit to excellent credit. Now, I wasn’t planning on applying for credit within the next six months, so my approach was fine. But if you’re refinancing your mortgage (or planning similarly something big) and you want a quick boost, don’t use this strategy. This is a good one for a long-term approach. Bottom Line When you want to boost your credit score, there are two basic rules you have to follow: First, keep your credit card balances low. Second, pay your bills on time (and in full). Do these two things and then toss in one or more of the sneaky ways above to give your score a kickstart. And remember — you do not have to carry a balance to build a good score. If you do that, you’re on a slippery slope to debt.
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