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In this Article: How to remove a negative item from your credit report (step-by-step).
Negative items on your credit report, such as a collections account, can haunt you. It can affect areas of your life you didn’t even realize until it’s happening and it’s too late.
Removing negative items from your credit report is tough, but is necessary if you want to move forward in any area of your life, whether applying for a new loan, getting a new job, or even opening a new bank account.
So, if you want to protect your credit score, then remove each negative item from your credit report.
Check out the best ways to remove a negative item from your credit report below.
Review Credit Report and Check for Inaccuracies
Inaccuracies happen often and guess what? If a tradeline on your credit report is inaccurate, the credit bureau must remove it.
It’s that simple.
Okay, maybe it’s not as easy as that, but it’s worth the effort if your credit report has errors. When I say errors, I mean anything. Sure, you paid your credit card three months late last year – that is accurate but look at the details.
Did the credit bureau or creditor report the dates wrong? Is the amount incorrect? Maybe there are transposed numbers in the account number. Any mistake you find, dispute it.
- Order your credit report. Everyone gets free access to their credit reports here. Usually, you get one from each credit bureau annually. Due to COVID, everyone has free weekly access through April 2021.
- Go through each tradeline and look for even the smallest errors.
- File a dispute online with the credit bureau and/or send a written letter in the mail.
- Include any proof you have of the error for faster processing.
The credit bureaus have 30 days to respond and verify the information. The Fair Credit Reporting Act (FCRA) gives credit bureaus 30 days to verify the information. If they can’t, by law, they must remove it from your credit report.
Can I Remove Negative Items from My Credit Report?
If everything reporting on your credit report is legit, then you’re stuck with it, but you have options. You will do more legwork and wait longer as the law is not on your side when the negative information is legit.
Still, you may be able to remove negative items from your credit report.
Check out these proven ways that have helped thousands of consumers.
How to Remove Negative Items from Credit Report (4 Proven Ways)
1. Write a Goodwill Letter
Do you usually pay your debts on time, but made a mistake? Maybe you just honestly forgot, or you were on vacation, and it slipped your mind.
Perhaps you changed checking accounts and your auto pay did not go through.
Whatever the case, if you usually have good payment habits, you may appeal to the creditor’s ‘heart.’
In a goodwill letter, you write directly to the creditor. In it, you admit your error and explain the reason in the hope that the creditor will choose to delete the negative information.
It may or may not work as creditors are under no obligation to honor your request.
2. Send a Pay for Delete offer to Your Creditor
If your negative information is legit, your best bet is to negotiate a pay for delete. This works best with collection agencies and/or charged-off accounts.
In a pay for delete, you agree to pay the balance in full (or the agreed-upon amount with the creditor).
In exchange, the creditor may delete the negative information entirely from your account.
That is why this works mostly with collections or charge-offs. You aren’t dealing with the creditor themselves (they really shouldn’t delete the information), but a collection agency can remove the collection from your credit report easier.
The negative (late payment) information will still show on your credit report, but without the collection (if the collection agency agrees).
3. Hire a Credit Repair Company
If you have more than one negative account on your credit report, hiring a credit repair company maybe your best option.
In fact, it is the primary option we recommend for consumers to remove negative items from their credit report.
Writing letters, managing phone calls, and tracking all the information can be time-consuming, confusing, and downright overwhelming. You may not know who to contact or what to say, but a credit repair company knows.
Do your research and hire a reputable company with a proven track record. They typically charge a setup fee plus a monthly fee, but you only pay as long as you need them. If it takes two months to fix your credit, then you pay for 2 months.
Each credit repair company offers different services. Some send dispute letters, while others also provide debt validation, debt settlement, and even cease and desist letter.
There is no guarantee that credit repair companies will have more luck than you could, but their expertise gives you a better chance. Plus, you save the time and stress of managing it yourself.
Credit Saint is the best credit repair company.
To date, they have removed thousands of negative items and are the most affordable. It truly is a bang for your buck.
>> More: Credit Saint Review
4. Wait it Out
It may seem like forever, but negative information falls off your credit report after 7 years – it’s the law.
There is some good news. Although the information is on your credit report, it doesn’t affect your credit score forever – typically just for the first year or two. As time passes, the effects on your credit score lessen.
Future lenders will see the negative information but will not consider it as strongly as they would if it happened within the last 12 – 24 months.
What Doesn’t Work
Desperation can make you do crazy things because you think anything will work. It won’t. Here are the top three things NOT to do when trying to remove negative items from your credit report.
File for Bankruptcy
Bankruptcy wipes your slate clean, literally. It wipes out your credit score and credit history. While at first, this seems good, but the bankruptcy stays on your credit report for 10 years.
That makes things worse.
Instead of a few delinquent accounts or even collections, you now have a whopping bankruptcy on your credit report that is hard to bounce back from. Much worse than negative credit report information.
Use this as a last resort, meaning you literally have no other options to pull yourself up by your bootstraps.
Closing a Credit Account
The ‘out of sight, out of mind’ mentality does not work here. Closing an account because you fell behind doesn’t make it go away. It hurts your credit score even more.
Your credit length (age of credit) plays an important role in your credit score. If you close your credit cards, you lower your credit age. Now not only do you have negative (late payment) information reporting, you lowered your credit age, which means your credit score fell even further.
Just because you close an account does not make it disappear from your credit report. The tradeline remains there, but it reports as ‘closed by consumer’ which isn’t good for your credit.
Paying a Delinquent Account
Getting current on the debt may feel good, but it does not make the debt go away. If you just pay it and assume your credit score will increase, it won’t.
Once you pay the debt, you lose your leverage. This doesn’t mean paying your debts isn’t a good idea, but don’t do it without one of the other steps above.
For example, if you negotiate a payoff amount and the collection agency or creditor agrees to accept it as payment in full, get it in writing.
Ask for a pay for delete in exchange for the payment. Without it, your credit report will show you paid the debt in full (if you did), but the negative information remains.
Now you’re short on cash and have bad credit – that’s probably not the combination you wanted. If you are in this situation, then seriously consider working with a credit repair company.
Last Resort: File a Complaint with the CFPB
Suppose you’ve taken some or most of the above steps and still have no resolution. In that case, the Consumer Financial Protection Bureau may help.
Make sure you exhaust all other options, including filing a dispute with the credit bureaus first. If you don’t get fair results or receive no answer, file a complaint with the CFPB here.
Begin to Rebuild Your Credit
After you take care of the issue, it’s time to rebuild your credit. This takes time and patience, don’t expect overnight changes.
Do the following:
- Pay your existing bills on time
- Limit your credit applications (inquiries on your credit report)
- Don’t close old accounts
- Limit how much you charge on your credit cards (keep your balances at 30% or less of the credit limit)
- Apply for a secured credit card if you have no credit
- Use your credit cards regularly, but pay the balances off in full to show credit responsibility
Wrapping Up: How to Remove a Negative Item from Your Credit Report
Removing a negative item from your credit report is essential. It takes patience, time, and plenty of follow-ups.
Start with a dispute with the credit bureaus and see what happens. You may be pleasantly surprised to learn that you win the dispute. You won’t know unless you try.
If the dispute fails, choose another method and be consistent in your efforts.
Consider hiring a credit repair company.
Your credit is an important part of your life. Not only does it affect what loans you may get, but it also controls your insurance premiums, deposits required for utility and/or cellphone packages, and sometimes even the job you get!
Once you remove a negative item, you can finally begin to improve your credit and enjoy a financially free life.
Why worry? Let Credit Saint solve your credit problems.
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