Your Money: Cleaning up your credit report

by Susan Tompor, USA TODAY

I heard from a mother the other day who wanted to know if there was any way her daughter could get rid of some bad blemishes on her credit report.

Could you ask creditors if they’d remove such items, she wondered?

This mom is certainly not alone in her worries. But we’re not talking about negotiating your way to a better grade school report card.

Many younger consumers are trying to figure out how to clean up their credit — particularly if they want to jump into the market for bargain-priced homes and super-low mortgage rates. The depth of the recession has left others in credit-challenged spots, too.

“It’s a really serious problem in economic hard times like this,” says Susan Grant, director of consumer protection for the Consumer Federation of America.

Are there ways to get those bad marks removed?

“No guaranteed ways, but there are ways,” suggests Gerri Detweiler, director of consumer education for

Detweiler says that in some limited cases it can work to try to negotiate on your own behalf with creditors to get items removed.

“It’s a negotiation like anything else. You may or may not get it,” Detweiler admits. “You’re really trying to ask them to do you a favor here.”

Favor is the operative word here, as many credit experts say it’s extremely tough to get anything legitimate removed from a credit report.

If an item on a report is accurate, generally you’re out of luck and won’t be able to negotiate it off a report.

“If it’s accurate, legally it doesn’t have to be removed,” Grant said.

Where might a consumer have some negotiating room?

Perhaps, Detweiler said, if a consumer has an overall good report but missed a bill during a vacation or lost a bill during a move to a new home.

Detweiler said a creditor would be more likely to remove a single late payment that appears to be an isolated incident.

The consumer might request a “goodwill adjustment,” pointing out they otherwise had a perfect payment history for several years, she said. But a consumer could have to make repeated requests — including e-mails, faxes and phone calls — before getting such an adjustment.

What if you want to barter with a collection agency? Detweiler said it’s worth trying.”You have to get it in writing,” she said. “If you don’t get it in writing, you don’t have an agreement.”

Don’t bet on this strategy working, though, according to other credit experts.

More often, you’re going to be out of luck if you offer to pay a collector and demand that an item be removed from a credit report in exchange for your money. Credit-reporting agencies, such as Experian, frown on this one big time.

Sure, plenty of consumers try to make a deal, particularly if a negative entry is standing in the way of buying a car or refinancing a mortgage, said James Angelo, president of J.J. Marshall & Associates, a collection agency in Shelby Township. But he said it doesn’t work. It’s an issue of fairness — and integrity of reporting.

“How fair is it to the guy who pays his debts?” Angelo said. A paid collections account would be reported as paid but not deleted from a credit report.

Consumers, of course, need to steer clear of costly gimmicks.

The Federal Trade Commission late last month took action involving a credit repair CD titled “Credit Solutions.”

The FTC is mailing 831 checks of $13.70 each to consumers who allegedly were charged an illegal advance fee for that CD, which had information on how to repair your credit. Warning signs of a scam include: A guarantee to erase bad credit, claims that you can create a credit identity and requiring money upfront to repair your credit.

As some people have returned to work in Michigan, there is more focus on paying off bills and rebuilding credit, says Kathryn Moore, financial counselor for GreenPath Debt Solutions, a nationwide, nonprofit financial counseling group based in Farmington Hills.

“If you owe the debt, the best thing to do is figure out a plan to pay it back,” she says. Typically, most accurate items, including late payments, can remain on a credit report for seven years and bankruptcy information can remain for 10 years.

What consumers don’t understand is that some information — such as late payments — can gradually take on less importance a couple of years after an event even if it’s still listed on a credit report.

So one way to build up a positive score is to actively pay future bills on time and hold down borrowing.

To build a better credit score, you can do such things as making sure to use a small percentage of the available credit on a card.

John Ulzheimer, president of consumer education at in Atlanta, said consumers can certainly dispute wrong items with lenders and collection agencies, too.

By law, the lender and collection agency is required to perform a reasonable investigation.

But disputing an item does not mean that you’re necessarily going to have it removed from a credit report.

“If the item is correct, then contacting the lender isn’t going to lead to a removal,” Ulzheimer said.

Cleaning up your credit:

Three nationwide consumer credit reporting companies — Equifax, Experian and TransUnion — must provide free copies of your credit report once every 12 months.

But consumers must take action to get their reports. See www.annualcreditreport.comor call 877-322-8228 to order a free annual report. Do not contact the agencies individually or via another number, because you could end up paying for the report. Also beware of fake websites.

To get a free report, you provide your name, address, Social Security number, and date of birth. And you’re likely going to need to give some information only you’d know — like the amount of your monthly mortgage — to prove you are who you claim you are.

See www.askdoctordebt.comfor information on repairing credit. The site was created by the ACA International Education Foundation, an association of credit and collections professionals.

Do not try to invent a “new” credit identity — and then a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number. The Federal Trade Commission warns consumers that it’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number and to obtain an Employer Identification Number from the IRS under false pretenses.

You can dispute mistakes or outdated items on your credit report — at no charge. See the FTC website for advice on how to write a dispute letter.


Michelle Castle provides mortgage loans to all of North Texas and Southern Oklahoma. Call Michelle Castle at (903) 892-1998 if you are looking for a home loan in North Texas and Southern Oklahoma.  Click here to visit Michelle’s website and apply for a loan.

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