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Rebuilding Your Credit by Credit.com You can’t erase the past. Negative records such as bankruptcy and collection accounts will remain on your credit report for 7-10 years. But with a little work, you can improve your credit even before these negative records expire. Here are five easy steps you can take to rebuild your credit. Step 1: Survey the damages The first step to rebuilding your credit is to look at exactly where you stand. Don’t skip this step because you think you already know what is on your credit reports or are scared to see what may be reported. Bite the bullet and order all three of your credit reports and all three of your credit scores. Ordering online is simple, easy, and secure. Plus, contrary to popular rumors, checking your own credit data never damages your credit scores. Print each report and review it closely. Highlight any negative records or inaccuracies that are damaging your credit score. Are all the accounts listed accurate? Do you understand all the information listed on your credit report? Step 2: Check the expiration dates By law, negative records must remain on your credit report for 7-10 years. The exact expiration date varies depending upon the type of record. Paying off an old collection debt or discharging your bankruptcy does not remove these records from your credit reports. For each of the negative records on your credit report (including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records), look up the exact date they are set to expire from your credit report. You will likely see a major improvement in your credit score when these records expire. Step 3: Dispute the errors If you find inaccurate records, fraudulent accounts, or records that should have expired on you credit reports, you have the right to dispute these errors. You'll need to send a separate dispute letter to each of the credit bureaus to correct your Equifax, Experian, and TransUnion records. Once your dispute is received, the credit bureaus have 30 days to investigate and determine whether or not to make the change you have requested. Do not try to dispute accurate or positive information that is listed on your credit report. Accurate information cannot be removed from your credit reports and it is a waste of time to attempt to dispute these records. Disputing positive information may actually harm your credit scores. Step 4: Start adding positive information Now that you know when your negative records will disappear from your credit report and you have disputed any inaccuracies, you are ready to start rebuilding your credit. Since there is no way to remove negative information from your credit report, the best way to improve your score is to add new positive information. Open up a new credit card (or a secured credit card) and use it responsibly each month. Keep your balances low and always pay your bill on time. Sign up for an online banking service that allows you to keep a close eye on your accounts. By not making any late payments, using credit responsibly, and avoiding unnecessary applications for credit, you are building a new history of good credit behavior on your credit report. Over time, you may want to open additional credit card accounts or obtain a loan to boost your credit score even higher. Step 5: Monitor your progress It's easy to keep track of your credit score improvement with the new types of credit monitoring programs available today. Instead of just giving you occasional access to your credit report and email alerts, these new credit monitoring programs include unlimited access to your credit reports and credit scores, identity theft insurance, credit score monitoring, daily alerts, and more. Once you have signed up for a credit monitoring service, you will be able to track your credit score progress closely. Your credit score should improve steadily as you continue to use credit responsibly and add new positive information to your credit reports. Correcting Your Credit Report by Credit.com This step-by-step guide shows you the best way to correct inaccurate information on your credit reports. First, check the expiration dates of the records. Next, customize our sample dispute letter and send your correction to the credit bureaus. Keeping your credit reports accurate can be that simple! Step 1: Look for inaccuracies Order your credit reports and credit scores from Equifax, Experian, and TransUnion online. Print each report and review it carefully. Highlight any inaccurate information and negative records that could be harming your credit scores. Check when the negative records are set to expire using this guide: • Bankruptcy filing records – Bankruptcy filing records expire from your credit reports 10 years after the filing date. Based on credit bureau preferences, Chapter 13 bankruptcy filings may be removed from your report after 7 years instead. Each account marked as “included in BK” remains on your report for 7 years from the filing. • Charge-off records – A record appears on your credit report when a creditor or lender charges-off your delinquent debt as a loss. This record remains on your credit report for 7 years. • Collection records – Collection records expire 7 years after the last 180 day late payment that led to the account being sold to collections. This expiration date is the same even if the account was sold to another collection agency. • Closed accounts – Closed negative accounts (with late payment or other negative records) will expire from your credit report after 7 years. Closed positive accounts (with no late payments or other negative records) can remain on your credit report longer. • Foreclosure records – Property died-in-lieu and foreclosure records will remain on your credit report for 7 years. • Inquiries – Records of credit and loan applications will remain on your credit report for 1-2 years. Checking your own credit reports and scores online does not cause this kind of damaging inquiry. • Judgments – Court decisions such child support, civil, and small claims judgments will remain on your credit report for 7 years after the filing date. • Late payments – All late payment records remain on your credit report for 7 years. However, only late payments that go beyond 30 days will continue to have a negative impact for all seven years. • Repossession records – Vehicle and property repossession records remain on your credit report for 7 years. • Tax liens – Tax lien records can remain on your credit report indefinitely if left unpaid. Once the lien is paid, the record remains on your credit report for 7 years from the paid date. This is true for city, country, state, and federal tax liens. You should use this expiration information to determine what items on your credit report are really inaccurate. Along with expired records, look for fraudulent accounts, crossed records, and data errors on your report. Step 2: Write a dispute Once you have determined exactly what is inaccurate on your credit reports, it’s time to write a letter of dispute to the credit bureaus. You will need to send a letter to each of the three credit bureaus to have the information investigated and corrected on each of your credit reports. Even though all three bureaus now offer online disputing, it is a good idea to still write your dispute in letter form for your records. You can use this template to put together your dispute letter: (Date) (Your name) (Street address) (City, state, and zip code) (Phone number) Dispute Investigation Department (Business name) (Street address) (City, state, and zip code) Dispute Investigation Department, I am writing to inform you that there is inaccurate information on my credit report. The following data is not correct and should be updated: (List each inaccuracy on your credit report. Include exactly why it is in inaccurate and what it should be replaced with) I have attached a marked copy of my credit report to assist your investigation. In addition, I have included (list the copies of account records, statements, and communication records). Please feel free to call me at (phone number) if you have any questions or need additional information to resolved this dispute. Thank you for your assistance with this matter, (Your full name) (Signature) (Social Security number) Step 3: File a dispute Submitting your dispute by mail is best, but only Equifax and TransUnion allow this kind of dispute. Experian requires all disputes to be submitted online. For phone or online disputes, you may need to provide the identification number located at the bottom of your recent credit report. Using the information you put together in Step 2, submit your dispute to each of the credit bureaus: Equifax P.O. Box 740256 Atlanta, GA 30374-0241 Dispute online Experian Dispute online TransUnion 2 Baldwin Place P.O. Box 2000 Chester, PA 19022 1-800-916-8800 Dispute online Step 4: Track the results The credit bureaus have 30 days to investigate your dispute and make changes to your credit report. Once this investigation is complete, they will send you a letter that includes information about what was and was not updated on your credit reports. If you were unable to get an error corrected, try submitting your dispute again with new documentation. You can also try working directly with the company that reported the error to have the matter corrected.
