The Fair Credit Reporting Act (FCRA) provides consumers a way to legally repair bad credit by disputing erroneous information contained in their credit reports. If you find information on your credit report that is outdated or inaccurate, your first step should be to contact the consumer reporting agency (CRA) so it can start an investigation.
Step 1
Get copies of your credit reports from all three credit reporting agencies (CRAs)--Equifax, Experian and TransUnion. Under the FCRA, you're entitled to a free copy of your credit reports from these CRAs each year. The authorized website in which to access your free reports is annualcreditreport.com. You're also entitled to receive a free copy of your reports in other circumstances, such as if you're application for a credit card or loan has been denied or you don't get a job because of the information reflected in your credit history (see Resources).
Step 2
Go through each credit report thoroughly and highlight or underline each item that's in error. According to Credit.com, expired negative records should not be reflected on your reports. Most black marks on your credit history endure for seven years. However, bankruptcy typically stays on your report for 10 years, and some negative information, such as an unpaid tax lien, has no time limit. Also look for accounts that don't belong to you or that you don't recognize--you may be the victim of identity theft.
Step 3
Contact the CRA in writing to dispute the error. Your letter should contain your complete name and contact information, as well as a brief statement that identifies the errors and why you feel they should be removed. The Federal Trade Commission advises including a copy of your credit report in your correspondence with the questionable items circled, as well as copies of any supporting documentation you might have. Send your correspondence by certified mail, return receipt requested. (See Resources link below for a sample dispute letter.)
Step 4
Give the CRA around 30 days in which to investigate your dispute and get back to you in writing. If the CRA discovers that the information in your report is erroneous, it will be removed--this will help you repair bad credit. If the negative information isn't removed, you can submit a brief statement to the CRA to be included in your report, typically for a small fee.
Step 5
Be honest with yourself if you can legally repair your bad credit. The same laws that work to ensure that your credit reports don't show inaccurate information require CRAs to keep accurate negative information in your credit report until the records expire. Steer clear of credit repair clinics that guarantee they can erase bad credit from your report and give you a clean slate--this is not possible. Chances are excellent that the "services" these companies offer are scams (see Resources).
Things You'll Need
- Copies of credit reports
- Copies of supporting documentation
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