Even if one has a poor credit score, this greatly affects the various aspects of one’s financial life. It disqualifies people from accessing loans and credit cards, attracts higher interest rates, and hampers a person’s ability to secure a house or apartment among others. Maintaining good credit is advisable, but can one wipe off a negative credit history completely?
Sadly, there is no magic solution for removing all the unpleasant items from your credit reports right away. The FCRA also allows credit reporting agencies to report negative information for up to 7 years or up to 10 years for any bankruptcy. But, there are certain ways by which one can try to delete wrong credit data and trends with time, they reduce the previous credit misdeeds.
Dispute Inaccurate Information
The first thing that you need to do is to obtain your credit reports that are with Experian, Equifax, and TransUnion to analyze them in search of erroneous data. This includes:
- It includes all the other accounts that you do not own.
- Having wrong account balances, credit limits, payment history, and other data for some accounts
- Some customers have balances or amounts in arrears at the end of the accounting period
- Its other incorrect personal data
The FCRA also outlines the roles and responsibilities of both the credit reporting agencies and your lenders who are required to ensure any inaccurate or incomplete information in your credit file is corrected.
If you discover any mistakes in the reports, report the dispute with each bureau, either through its website or by post. Include as many characteristics you can note regarding the inaccuracy of the information. The agency is then within 30 days to investigate contacting the company that provided that particular data. If the credit reporting agency is in agreement that the information is inaccurate or incomplete or cannot be verified, such information must be deleted from your credit reports.
Negotiate with Lenders
Regarding the types of negative credit marks that are perfectly valid such as late payments or collections accounts, you can approach your lenders to have some alteration that will slightly help reduce the negative impacts on your scores. Two options to bring up are:
Goodwill deletion requests: There are ways that you can write goodwill letters to lenders requesting them to wipe off the negative entries as a courtesy following some circumstances. It might not help, but it won’t harm to try with a request politely.
Pay-for-delete agreements: Try to negotiate a lump sum payoff to get the collection agency to remove the entry completely from your credit reports. It’s advisable to ensure that you receive this agreement in writing before you make any payment.
It is important to note that according to the FCRA regulation, a lender is not compelled to accept either of these requests, however, there are always exceptions. Never give up and ask again if you haven’t reached the appropriate person or if the person you are talking to says it cannot be done.
Wait It Out
Old negative remarks such as the payment history of the accounts that you have paid later than expected and the collections accounts are likely to drop off from your credit record.
Here are the general timelines:
- Deductions for delayed payment – 7 years
- Collections accounts – net 7 from the date which the account went unpaid
- A breakdown of bankruptcy and foreclosure filings over the last 10 years
It is crucial to wait until the waiting period elapses without incurring any new issues such as missing payments. Ensure that credit card balances are kept minimal and credit utilization is below 30 percent. The credit score is usually determined by the mistakes you make regarding your credit use and payment and these over time will count less on your credit scores.
Unfortunately, you cannot make this clock tick faster, but managing credit mistakes and maintaining good credit standing moving forward will enable a consumer to wipe the credit score that was negatively affected by previous credit mistakes.
Build Positive Credit
This means that although they do not allow you to remove bad credit history altogether, creating a new positive credit history is equally important in negating the old negatives. Adopt good credit score practices by timely payment of all your bills, managing credit card usage, avoiding debt, and applying for fewer credit lines.
You can also try to establish positive new credit, like secured credit cards, credit builder loans, or phone services with Experian Boost. That way you can use them to show that you have always made your payments on time positively. In the long run, the new good marks will also be useful in offsetting and reducing the information that is negative in your credit files.
Improve Other Credit Factors
Your payment history and outstanding debts contribute the most to your overall credit scores, but other factors also matter
Credit utilization – Have a different type of loans such as revolving credit cards, installment credit, mortgages,s, etc.
Age of credit history - Be currently active in credit accounts.
Inquiries – Reduce the number of new credit accounts, which will be offered to you.
Total accounts – Possess a couple of other active and easily managed accounts.
Maintaining a low debt-to-income ratio and avoiding credit cards that are too numerous or opened too frequently are also beneficial in the long run for one's credit.
The Peculiarities of Negative Credit Removal
But it is annoying and the truth is that a bad credit history takes years to be removed from your credit record. Technically speaking, once you get some negative information out, there are certain reporting periods before you can request for the information to be recalled. Your past sins, as it were, follow you for a long time as you watch your scores and reports change.
However, to reduce the impact the old negative remarks have, you can take the following measures, learn your rights, take dispute action, negotiate with lenders if possible, wait for time to pass, and create a positive credit history. It is wise to be patient, and persistent and practice good financial hygiene with an eye on the future to eliminate the practical effect of a bad credit history.
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