The Best Way to Help Clean Credit

Bad credit can keep you from owning a house, car or sending your children to college. There is good news: You don't have to have it forever. "Cleaning" your credit report is the process of improving your credit report by taking certain actions. One of the best ways to help clean your credit is to have bad accounts or notations removed from your credit report. These accounts include charge offs, collections and, to a lesser degree, late payments.

File an Online Dispute

If you have recently received your credit report, you have the option of filing an online dispute with the credit bureau. The bureau will ask the lender or collector to verify the account. If they do not do so with 30 to 45 days---depending on how you obtained your credit report, according to Equifax---the credit bureau will automatically delete the account under the Fair Credit Reporting Act. If you have an older, paid collection account or charge off, the lender or collector may not bother to respond to the dispute or may no longer have the information necessary to verify the account.

Ask Nicely

Although late payment notations don't hurt your credit as badly as a charge off or collection account, they still damage your credit score. The more recent the late payments were, the more they will hurt your score. If you have a good relationship with the company by which the late payments have been reported, then it may be worth your while to call the company's customer service number or write a letter and very politely ask to have the notations removed. You may want to mention your long payment history with the company or the years of on-time payments you have had since your late payment notations, if one of these applies to your situation.

Let it 'Fall Off'

All collection, charge offs and late payment notations should automatically "fall off" after seven years under the Fair Credit Reporting Act. For charge offs and collection accounts, the clock starts ticking 180 days after the date of the first delinquency; in other words, 180 days after the first missed payment. So, if you have a credit account that you last paid on in July 2004, it should "fall off" in February of 2012. This remains the same no matter how many collection agencies buy it during that time. The date of the first delinquency remains the same as does the date that the debt should "fall off" of your credit report, according to the Federal Trade Commission. Collection agencies may try to move this date forward, a process known as negative re-aging, but it is illegal and you should dispute this with the credit bureaus, according to Credit.com.