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How to Clean Up Credit Report Dings

Now let’s get to the real meat and potatoes of how to improve credit, and that is to clean credit report dings, blemishes, and remove negative items. This is most often done by using your rights as a consumer granted by the FCRA.

This federal legislation gives us the ability to challenge and dispute any item on our credit reports, so long as we believe the item is misleading, incorrect, or made in error. There’s three ways to dispute credit report items: online, over the phone, and by mail.

On a sidebar, due to amendments to the FCRA, you can also dispute a data furnisher (company reporting your account information) directly bypassing the credit bureaus. This would be for extreme cases such as those of identity theft.

Traditionally, and for our purposes here, we’re going through the credit dispute process directly with the credit bureaus. Once the credit bureaus get your dispute and deem it valid, they’re required to investigate the item.

They’ll call it a re-investigation, nevertheless, they’ll contact the data furnisher (company reporting the information) and request verification of the item. If the item is verified, then it’ll remain on your credit report, and may be updated with accurate information.

However, if the item is not verified, which is an incredibly common result of these credit bureau re-investigations, then in compliance with the FCRA it must be removed from your credit reports. This is how to clear credit report dings, blemishes, and remove negative items. And do so legally, be exercising your consumer rights.

In full disclosure, the challenge comes in getting the credit bureaus to actually conduct a re-investigation. In 2015, all three credit bureaus collectively agreed to settle and pay $6 million to 31 state attorney generals for allegedly violating consumer rights under the FCRA.

In short, they were allegedly ignoring consumer disputes. You may have seen a 60 Minutes segment in recent years, featuring this story. The credit bureaus in full truth, have been violating the FCRA since the day it was passed into law.

Part of the reason, is because they’re for-profit businesses. And a little-known and virtually never discussed secret is for the credit bureaus to actually investigate or re-investigate an item on any consumer’s credit report, it costs them money.

This money is very directly otherwise profit. With estimates of the credit bureaus receiving roughly 8 million consumer disputes, every single year, it makes logical sense they’ve also invested decades in finding the best possible ways to avoid or at least minimize this expense.

This is why Congress felt it necessary way back in 1970 to pass laws requiring the credit bureaus to investigate consumer disputes. And they’ve fined the credit bureaus repeatedly, and seemingly consistently for violating this legislation, since day one.

Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.

We’d be remiss if we didn’t also mention for folks currently dealing with debt collectors. There is again federal legislation in the Fair Debt Collection Practices Act (FDCPA). This legislation is supposed to regulate the debt collection industry.

And yes, it’s broken about as often as our drug laws. Nonetheless, there is a process for some folks, after first performing the necessary due diligence, when paying off debt in collections can be an effective way to remove collections from credit report files.

One of the most common questions we hear from our members is how long does it take to improve credit score? Understandably. Here’s the quick and short answer, with aggressive action you can frequently see significant credit restoration progress in as little as 90 days.

It won’t happen overnight. And a more appropriate answer is to use an analogy. Hang with me here, when you have a bad credit score it’s metaphorically a bit like having a substance abuse problem. The exact amount of time it will take to fix your credit, will depend on the severity of the problem.

Obviously, for someone with a late payment, maybe even a charge off account, and a collection account. They’re going to have a much shorter path to improve credit, just like a young college student who drinks a little too often.

In comparison to an individual that has gone through bankruptcy, has judgements, repossessions, tax liens, etc., on his credit report. His time frame is going to be much longer, much the same as a guy who has smoked crack for two decades will have a much longer road to recovery.

We hope your less-than-perfect credit isn’t a result of substance abuse. And we don’t use this example to make light of addiction. It’s simply for illustrative purposes, and to be as clear about how long it really will take to improve credit, as possible.

The Good News

Here’s the good news, though you’ve probably heard it as bad news, we’re talking about the Fair Credit Reporting Act (FCRA). This federal legislation is what dictates and determines how long a negative credit report item can remain on your credit file.

In most cases, it’s a maximum of seven long, excruciating, and expensive years. Most people, don’t catch that nuance, did you? Seven years is the maximum amount of time.

In other words, there is no minimum amount of time any negative item must remain on your credit report. And there ain’t no good reason to live with bad credit for the maximum seven years.

That’s like serving the maximum sentence in prison. Come on man, even O.J. got out early. However, unlike with prison, your credit report isn’t lucky enough to have a parole hearing, nor does your good behavior have any bearing.