How to Fix Negative Credit Reports

Negative information on your credit report could make it difficult for you to buy a house, a car or even take out a small loan. The negative information can remain on your credit report for at least seven years, but that may not be quite as bad as it seems. Your score is only one thing creditors review when considering you for credit. Most also will review how you have paid your bills over the past 12-24 months, and a steady string of on-time payments is the best way to improve your credit and offset any negative information.

Instructions

1

Order a free copy of your credit report. Use the website Annual Credit Report (see Resources, below), which was set up by the credit bureaus to issue free credit reports as required by federal law. Click on "Request Report" on the home page to order or call 877-322-8228.

2

Refer to your credit report as you make a list of all your negative information. Include all accounts listed as past due, charged-off or in collections. Make payments to bring open, but delinquent, accounts current. If you don't have the money, contact your creditors about so-called hardship plans that could temporarily reduce your minimum monthly payments and interest rates while you catch up.

3

Contact creditors or debt collectors about old accounts that have been charged off. Offer to settle the accounts for less than the full amount owed--a common tactic called debt settlement. Debt collectors will sometimes settle old accounts for half the original balance or even less, according to a Jan. 2, 2009 story in The New York Times. Also ask the debt collector to delete the negative information from your report as a condition of payment. The debt collector may not agree, but it won't hurt to ask.

4

Audit the rest of your credit report for inaccuracies. The Fair Credit Reporting Act gives you the right to challenge all information on your credit report--even negative information that you know is correct. This loophole could provide you with another opportunity to fix your negative information. According to the fair credit act, credit bureaus must confirm the accuracy of anything you challenge within 30 days after receiving notice from you. By law, the information must be removed if the credit bureau cannot confirm its accuracy before the deadline expires. Dispute the information by writing a letter and mailing it to the credit bureau at its address listed on your credit report. Include your name, address, and Social Security number. List the account numbers for the negative information that you are disputing and provide a reason. You can claim that you never paid the account late or provide another reason for your dispute. Ask the credit bureau to delete the negative information upon completion of its investigation. The credit bureau will send you a letter regarding its findings in about 30 days.