What Is the Credit Score Increase After Deleting a Negative Item?

According to Bankrate.com, seventy percent of consumers have an error on their credit report -- which could cost them a loan or even a job. The credit rating agencies have a system in place for disputing these errors. If an investigation finds an error on your report, your credit score could see a huge increase.

Effects

Any negative item will ding your credit score. Removing an erroneous negative item will raise your score, but the severity of the error dictates how much of an increase you will see. Eighty percent of credit reports contain a serious red flag, such as very late payment or erroneous collections account. These can drop your score over a 100 points and cause lenders to deny you credit.

Benefits

If you have any suspicions about a negative item on your credit report, you should dispute it. Challenges to erroneous items cost you nothing and do not harm your score, so you only stand to benefit. Just make sure you do not flood credit rating agencies with disputes or it looks like an attempt to game the system. You should tackle one error at a time, starting with accounts that do not belong to you. Begin the next dispute after a complete investigation into the first dispute.

Warning

Even if you win a dispute against a negative item on your credit report, the blemish could come back if evidences arises that proves the negative item was legitimate. How much this hurts your score depends on the positive -- or negative -- updates to your credit in the meantime.

Tip

The most common errors you see on a credit report are with payments, such as reporting an on-time payment as 30, 60 or even 90 days late, according to the Motley Fool. A single payment erroneously reported as 30 or 60 days late won't change your score much if you have an otherwise excellent credit history. Payments more than 90 days late can hurt you as much as a bankruptcy.

Note that you can also be missing positive accounts. If your creditor does not report a positive account to the credit rating agencies, ask him to do so.