How To Clean Your Credit Report

There are times in our lives when our finances may not be in the best shape. Regardless of the circumstances that got us to that point, it is in our long-term best interest to do what we can to clean up our credit - and our credit report.

The first thing to do is get copies of our credit reports from all three credit bureaus. We are able to get free copies of our reports from www.annualcreditreport.com. These are available for free once a year. We can get them by mail or get instant access online.

Once we have all of our credit reports in hand, we should go through them thoroughly to make sure that the information is correct. We should make a note of all of the accounts that have errors.

Write to each credit bureau

We then write letters to each of the bureaus asking them to verify the information with the creditors. We need to make a list of each inaccurate account with the reason we feel that it is incorrect. This can be a basic statement, such as, "not mine," "not late" or "incorrect status."

If we have any supporting information that confirms our position, we should include that with the letter. For example, if an account has been paid off but it is not showing that on the report, a current statement with the zero balance can make it easier to get the report corrected.

When mailing the letters, we should send them out with delivery confirmation. This means that the post office will verify that each bureau received their letter. Since the bureaus have 30 days to respond to the letter, we start our count based on the date that the letter was received.

Document everything

We should make sure that we keep copies and records of everything. In the event that the bureaus do not get back with us within the time frame expected, copies will enable us to prove our position and get the situation rectified quickly.

Many times, the bureaus will get back to us within the 30-day period with the results of their research. The bureaus will note which items have been verified by the creditors. These items will remain on the report. They will also let us know which items were not confirmed. These items should have been removed.

If the 30 days pass with no response from any of the three bureaus, we should send them a reminder letter, along with a copy of the original letter sent. In the letter, we should note that the verification period allowed has passed, and that, by law, the bureau is obligated to remove the items in question. This would happen whether or not the information is correct.

Although the process requires a lot of patience, it never hurts to try the dispute letters. The worst-case scenario is that our reports don't change at all. However, we are very likely to see some changes with just one letter. If the change is not significant enough, we can send another letter to see if we have better luck the next time.

About the Author

Ozeme J. Bonnette is a financial coach, speaker, and author of Get What Belongs to You: A Christian Guide to Managing Your Finances. After working for a top financial services company, she shifted her focus to speaking to groups hoping to increase financial literacy. She earned 3 Bachelor's degrees at Fresno State, and her MBA at UCLA's Anderson School. Her blog is http://www.povertynorriches.com. Reach her at ozeme@thechristianmoneycoach.com.

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