Removing Negative Credit Report Items

How to remove negative items or offset them with positive actions.

All of the negative credit report items mentioned in the video can lead to a lower credit score. However, it’s important to note that these items aren’t always accurate. Negative items appear in your credit report for three reasons:

  1. You took an action that legitimately led the lender to make a report to the credit bureaus.
  2. The credit bureau has incorrect information about you. This can happen if a lender makes a reporting mistake or the credit bureau confuses you for another credit user.
  3. Someone stole your identity and they’re misusing credit in your name.

What caused a negative item also determines the method for its removal.

#1: What happens when the information is legitimate

There is no legal practice that removes legitimate negative items from your credit report early. The penalty periods described in the video stand unless a credit bureau changes its policy or Congress passes a new law. Any company that claims it can help you get around legitimate negative credit report items is a scam! Don’t sign up and report the company to the FTC immediately.

There is good news, though. The impact of negative items decreases over time until the item disappears completely. However, even before that you can offset the impact of a negative item in the past with positive actions now. Every payment you make on time is positive payment history. Minimizing credit card debt by paying it off as quickly as possible improves your credit scores, too. Manage your debts effectively and your score should improve even with negative items still present.

#2: What to do for errors and mistakes

If a negative item in your credit report is not accurate, you can dispute it. You inform the credit bureau of the error, by letter or online. The credit bureau attempts to verify the information they have. If they can’t verify it, they have to remove it. Most people know of this as “credit repair.”

The Fair Credit Reporting Act is the law that details how consumers can correct credit report errors on their own. The Credit Repair Organizations Act dictates how a third-party can make credit report disputes on your behalf. Only an attorney licensed in your state and authorized to act on your behalf can make disputes for you. If a company that doesn’t provide legal representation offers to “repair your credit” be cautious; it may be a scam.

Still, you can legally correct your own credit and even hire someone to make disputes for you. This can remove negative credit report items legally because the penalty shouldn’t be there in the first place.

#3: What to do if negative items signal identity theft

In some cases, you may report an account you didn’t open or collection account you didn’t incur to a credit bureau. Then the credit bureau comes back and verifies the item as correct. This may be a sign of identity theft  – i.e. someone using credit in your name.

When this happens, contact the fraud department for the creditor or lender that services the account. Work with servicer to close the account, since someone opened it fraudulently without your authorization.

If the account is a collection account, contact the collector. In some cases, they may simply have you confused with someone else. In other cases, it might show someone opened a credit line in your name and didn’t pay it back.

If you find identity theft through negative credit report items, follow the steps in Consolidated Credit’s Identity Theft Recovery Guide.