How to Get a New Excellent Credit File

You have three separate credit files because there are three national credit bureaus, each of which keeps its own records on you. The files should be similar because TransUnion, Equifax and Experian all collect the same type of data. The Federal Reserve Bank of San Francisco advises that they collect information on your credit account balances, whether you pay bills on time, available limits and court actions related to your finances, like judgments and bankruptcies. Negative items hurt you, but they do not stay in your file permanently so you have an opportunity to rebuild excellent credit.

Instructions

1

Order your credit files from TransUnion, Equifax and Experian. Use the official free credit report website if you qualify, the Federal Trade Commission (FTC) advises. You are eligible if you have not already ordered your three reports through the site within the past 12 months. If you have, you must wait until a year has passed or buy file copies directly from the credit bureaus.

2

Assess the condition of your files. Pay special attention to all the negative items. Most, like late payments, accounts written off as noncollectable, debt collector entries, repossessions and foreclosures, automatically disappear after seven years, while bankruptcies stay in your files for 10 years. Focus your attention on recent items since older items lose their influence on your credit as soon as they get erased.

3

Audit all the negative items, especially the most recent ones, for any mistakes. Anything from an improperly spelled creditor name to a misreported balance or an incorrect payment status gives you an opening to dispute the data, the Divorcenet website explains. The credit bureaus are not required to audit your files themselves, but they are legally required by the Fair Credit Reporting Act to investigate your complaints. The bureau websites have online dispute forms. The law gives them 30 days to either verify the data or erase it. Divorcenet advises that they often have trouble verifying entries within the required time so the bad entries get wiped out of your file.

4

Recheck your credit files once your disputes are all processed. The FTC explains that you get new no-cost copies from each bureau so you can see what has been removed. Make a list of the remaining negative items and the date they are due for automatic erasure.

5

Create a budget aimed to building up a perfect payment history until all your negative credit file data drops off because the reporting time frame has expired. Payment history is the most important aspect of your file, according to the MyFICO credit score company website. On-time payments help your credit score and prevent other issues like charge-offs and court judgments. You will have excellent new files once the old data is gone.