Credit Repair - Step #4: Handle Negative Information


Credit Repair - Step #4: Handle Negative Information

You may find that your credit report contains information that is negative, but is basically correct. If this is the case, here’s what you can do:

#1: Wait It Out As the negative information becomes older; it becomes less important to potential creditors and lenders. This is especially true if the information is more than two years old. Note: If you have unpaid tax liens or court judgments, they must be paid before the clock will start ticking for them to be removed from your credit reports. Waiting for information to become older can help. It’s a more effective strategy if you also actively rebuild your credit with a positive credit history

#2: Dispute It Remember, if the credit bureau can’t confirm information you dispute, that information must be removed. If any of your account information is incomplete or inaccurate, you may dispute that item. If the information is old, the account has been sold, or the creditor is simply too busy to respond in thirty days, it may simply be removed when you challenge it. There’s no guarantee that this will happen, but it does sometimes work.

#3: Rebuild It You won’t build better credit without positive credit references on your credit history. It’s not important to carry debt to build better credit, but it is important to maintain good credit accounts. If your credit rating has been damaged by financial hardship and you are having a hard time getting credit, consider getting a secured credit card to you give the means to build a positive credit history. Ideally, your credit report should show three or four active accounts (including credit cards, a car loan and/or a mortgage) paid on time each month. If you use credit cards to rebuild your credit, it’s to your advantage to pay the balance in full each month and avoid interest charges.

#4: Ask for Creditors to Re-Age Accounts If you fell behind on your bills and fell into financial distress due to an unexpected illness, a period of unemployment or some other crisis, you may be able to ask a creditor or lender to re-age your account once you start making payments again. Creditors and lenders are sometime willing to remove negative information (re-age the account), especially if you’ve had a good relationship with them in the past. It may take a few phone calls to find the right person who can help, so be patient!#5: Understand Special Situations The following are some common situations people encounter when trying to repair their own credit.

Bankruptcy: When you file for bankruptcy, your credit reports will list the bankruptcy as well as individual debts that were included in the bankruptcy. Those individual accounts are not removed from your credit report. However, once you have successfully completed your bankruptcy and the debts are discharged, any accounts that were included should reflect a zero balance. The bankruptcy, itself, will still be listed as a penalty in the public information section.

Collection Accounts: If you owe money to a collection agency, you may be able to negotiate to have the item removed in exchange for payment. They aren’t required to do so, however, and they usually cannot alter the information about the original account before it was sent to collections. It’s important to note paying off a collection account in and of itself will not typically boost your credit rating significantly, because collection accounts are automatically considered negative.

Co-Signers: When you co-sign on an account for someone, you agree to be responsible for the entire balance. If you have negative accounts on your report that you co-signed for, you may want to talk with the issuer about a payment plan. Try to negotiate to get a better interest rate or get late fees and finance charges waived on that account in exchange for payment.

Credit Counseling: A credit counseling program can help you get back on track by negotiating a payment plan with reduced interest and/or fees with your creditors.​

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