How to Fix Bad Credit That Is 7 Years Old

Monitoring your credit reports is extremely important. Credit scores affect your ability to get credit, the interest rates offered on loans and even employment opportunities. Most negative reports from creditors remain on your record for seven years, though bankruptcies remain for 10 years. Don't assume that a negative item will automatically fall off your report after seven years, however. In a December 2008 Federal Trade Commission study, 31.3 percent of participants acknowledged credit report mistakes.

Instructions

Check Your Credit Report for Errors

1

Obtain a copy of your credit report. Equifax, Experian and TransUnion are the major credit bureaus. You are entitled to a free copy of your credit report every 12 months from each bureau. You are allowed a free copy if you have been recently turned down for credit, or if you have been rejected for a job because of your credit score. Visit the Annual Credit Report website listed in the resource section and request your credit report.

2

Check your report for errors, specifically looking for any negative reports that are 7 years old or more. Remember, bankruptcies stay on your report for 10 years. Negative reports regarding unpaid judgments may remain past the seven-year mark if the statute of limitations is longer than seven years.

3

Notify the appropriate credit bureaus, in writing, of errors. The Federal Trade Commission website has a sample dispute letter for reporting errors. Include a copy of your credit report and circle the items that are in error. Send your letter by certified mail, requesting a return receipt so you can verify when the credit bureau receives the letter.

4

Notify your creditor, in writing, of your dispute. Include copies of documents that support your claim. If your creditor reports the disputed item again, the creditor must include that you have disputed the claim.

Bolster Your Existing Credit

5

Make payments on time. Payment history is 35 percent of your credit score.

6

Pay down your current debt. The percentage of debt on your card affects your credit rating. Maxed out cards lower your credit score.

7

Apply for a secure card to establish credit history, but make your payments on time. Secured credit card companies report payments to credit bureaus, which helps you establish a payment history.

8

Limit the number of new accounts. Opening multiple accounts lowers your credit score.