What Makes Up Your Credit Score
There are multiple credit score models available, and each scoring model has its private metrics and criteria. This means that your credit score may vary according to which model is used, but this should not be by much. Regardless of the model used, they all share the same purpose: to analyze credit reports and numerically measure whether a borrower can be trusted to pay their debts in time.
VantageScore and FICO scores are the ones consumers should pay the most attention to. Although they are separate scoring models, they still use the same source material: the credit reports generated by the three major credit reporting agencies.
FICO Scores:
The Fair Isaac Corporation created FICO scores, and its an industry standard used by most lenders. In a FICO score, there are five categories awarded different degrees of importance. The most important component is your payment history, while the least important are the new credit and credit mix. However, changes to any one of these categories can still affect your score.
- Payment history
Vantage Scores:
Developed by Experian, Transunion, and Equifax, a VantageScore prioritizes each category a bit differently than FICO scores:
- Total credit usage, balance, and available credit: extremely influential
- Credit mix and experience: highly influential
- Payment history: moderately influential
- Age of credit history: less influential
- New accounts: less influential
3 credit cards $30,000 total credit limit $5,000 in debt
How To Remove Negative Items From Your Credit Report Yourself
Your past financial mistakes stay as negative remarks on your credit report for several years. But the mistake may not be yours always. You can be wrongly marked by the lender or the credit bureau. Either way you are the one getting affected. Here are some ways you can remove unfavourable credit report entries from your credit report.
Submit a Dispute to your Lender
You can easily file for a credit report dispute through postal mail or online. If you want to submit a dispute online, then you must have recently collected a copy of your credit report. You can submit the dispute to your lender with enough proof supporting it.
If you want to dispute via mail, then draft a letter describing the credit report and submit copies of any proof you have. The lender makes the enquiry and will update the credit bureaus if there are any mistakes. If they have made an error they will remove it.
Make a Goodwill Request for Resolution
If youve already paid the account, but the payments were delayed, you can ask the lender for a goodwill deletion. Draft a letter to your lender, describing why you were late, state how youve since been a good paying customer, and ask that the accounts be reported more favorably. Again, creditors dont have to comply and some wont. On the other hand, some creditors will resolve it if your payments have been on time recently.;
Wait Out the Credit Reporting Time Limit
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Submit a Dispute to your Lender
Impact Of Identity Theft On Your Credit Report
Identity theft occurs when someone steals your personal information and uses it to apply for new lines of credit. If these new accounts go into default, they will appear on your credit report and hurt your score.
Cleaning up your credit after identity theft can take anywhere from a day to several months or even years. The longer it takes you to realize someone stole your identity, the more difficult it will be to undo the damage. Monitoring your credit report will help you to stay on top of potential fraudulent charges.
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Ask Creditors To Remove Negative Items
It is possible to ask creditors to remove items from your credit report in certain circumstances. For example, if you made regular payments for your auto loan on time, but then missed a single payment, you may be able to contact your creditor and get them to agree to remove the offending negative item.
You could also offer to pay the outstanding debt on a late bill this practice is known as debt re-aging. But be careful when using debt re-aging. While it can help you if the creditor agrees to remove the negative item from your report, your credit may be further negatively affected if you fail to pay the agreed-upon amount.
Send A Letter To The Reporting Creditor
You also want to send a similar letter to the creditor whos currently reporting the debt.
To do this, either reframe your credit bureau letter with copies of your documentation to the creditor or simply send a copy of the same letter with copies of any documents included. Avoid making statements that could restart the debt clock if the statute of limitations has not expired.
As with the credit bureau, send the letter certified with a return receipt requested. The creditor has 30 days to investigate your claims and respond.
Why this is important: Depending on who your creditor is, it may be faster to work directly with it to get your old debt off your credit report.
Who this affects most: Those with older debts with more established companies will benefit from contacting the original creditors. You may find it easier to work with larger, more established creditors than with smaller collection agencies.
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Can You Remove Negative Information From Your Credit Reports
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Your credit reports are like a financial report card an extremely useful record that helps lenders evaluate the risk involved in loaning money to you.
They contain information about your credit history including some bill repayment activity and the status of your credit accounts. This information includes how often you make your credit card or loan payments on time, how much total available credit you have, how much of that credit you’re currently using and whether you have outstanding debt.
If you’re delinquent on your loan payments, your debt may be transferred or sold to a collection agency. At that point, a new lender will be added to your credit reports, meaning your debt will appear twice: once with the original lender and again with the collection agency. You will have a set period of time to pay off the debt with the collection agency. The debt will stay on your credit report for as long as it remains unpaid and can only be removed approximately seven years from when you were first found delinquent.
Hire A Credit Repair Service
A reputable company like may be a viable solution if your report is riddled with inaccuracies that further complicate the repair process. can help you with the following items:
- Cleaning up credit report errors
- Disputing inaccurate negative entries
- Handling creditor negotiations
If you decide to hire a credit repair service, know that laws govern how they operate and what they can do. The establishes the following regulations governing credit repair services:
- They cannot provide false or misleading information concerning a persons credit status and identification
- They must provide a detailed description of the service
- They cannot receive payment for the performance of any service until said service has been entirely performed
- There must be a written contract detailing the services to be performed, the time frame during which these services will be performed, and the total cost for those services
- They cannot promise to remove accurate information from a credit report before the term set by law
- The consumer will have three days in which to review the contract and cancel without penalty
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Consult With A Professional
There are many independent credit repair agencies in Canada. These agencies use the aforementioned techniques along with a deep knowledge of the Canadian credit system to help you remove negative items from your credit score.
However, the buyer should beware there is no guarantee that your credit repair agency will succeed in removing negative items.
If you dont know where to start when rebuilding your credit, it can be a good idea to partner with a credit agency, but make sure you do your research, and pick a Canadian credit repair agency with a history of good outcomes and great customer feedback.
S To Recover Your Credit After Identity Theft
- Freeze credit
A credit freeze restricts access to your credit report. Credit reporting agencies can freeze your credit, effectively restricting anyone from opening new credit lines.
Existing creditors or debt collectors can still view the report, but not new creditors. Government agencies may have access, too, if mandated by court order, subpoena, or search warrant.
- Place a fraud alert
Victims of identity theft can notify one of the three major bureaus, which will then put a fraud alert on your report and notify the other bureaus to do the same.
This alert will stay on your report for more than a year, and any lender that views your report will see that you were a victim of fraud. Lenders will be more cautious and take additional steps to ensure the identity of the person applying for credit.
The initial fraud alert can stay on your credit report for up to 12 months, but an extended fraud alert will remain on your credit report for seven years unless you decide to remove it sooner.
- Report identity theft to the Federal Trade Commission .
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Documentation To Provide For Your Dispute
In addition to the above, you’ll need to provide:
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Proof of identity
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Your Social Security number and date of birth
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A copy of government-issued identification
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Your current address and past addresses;going back two years
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A copy of a utility bill or bank or insurance statement that includes your name and address
Initiate A Dispute Directly With The Reporting Business
Reporting business includes credit card issuers and banks. Upon receiving a dispute, they are also required by law to investigate and respond. If the reporting business corrects the issue, you saved yourself the step of contacting the credit reporting agency. It is important to make sure the items are cleaned up for all three credit bureaus mentioned above.
Trying to work out your debt directly with the lender will not change the amount of time said negative item will remain on your credit report. The seven-year retention period starts counting on the date the account was first reported past due or unpaid and does not change if you initiate negotiations to pay down the debt.
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Avoid The Following Strategies
Closing a line of credit that is already behind on payments.
This does nothing to remove the debt and can lower your score, as it will increase the debt-to-credit ratio.
Filing for bankruptcy
Bankruptcy should only be considered if the burden of debt becomes untenable. It should not be used as a tool to clear your credit because the impact of bankruptcy on a credit report is drastic. It will hurt credit score by up to 200 points or more and will also linger on your credit report for seven to ten years.
How To Get Your Free Credit Report
Getting your credit report is easy, especially if you havent used AnnualCreditReport.com yet. You can use this service to pull your credit reports from all 3 of the major credit agencies/bureaus quickly and easily, and for free.
The law states that all consumers are entitled to 1 free credit report from each of the major credit reporting bureaus each year.
If youve used up your annual credit report and you feel that you need to pull a fresh report, then you can use any of the credit bureaus websites to pull your report.
Most offer credit reports from all 3 bureaus, too. Other services, such as MyFICO.com , offer 3 reports as well. It doesnt matter where you get them, just be sure to have a recent report just in case theres anything new that pops up, and its always good to know your current credit scores .
There are a few ways you can go about this.
1. File Complaints with the Consumer Financial Protection Bureau
2. Write dispute letters to the CRAs.
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Strategies To Remove Bad Credit Report Entries Yourself
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When was the last time you looked at your credit report? Even if you regularly monitor your credit score, its still a good idea to scrutinize your full credit report at least once a year. Thats because your score can only tell you so much. Whereas your report will show all of your open accounts, inquiries, payment history, and other essential factors that can influence your overall credit rating.
Reviewing your credit report can give you a much better understanding of the factors that make up your credit score. It can even uncover errors that are negatively affecting your score. One study conducted by the Federal Trade Commission found that;one in five people;will has at least one error on their credit report. Continue reading for how to remove negative items from your credit report yourself.
Dispute Credit Report Errors
All three bureaus have an online dispute process, which is often the fastest way to fix a problem, or you can write a letter. You can also call, but you may not be able to complete your dispute over the phone. Here’s information for each bureau:
How to dispute Equifax credit report errors
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Write to;Equifax, P.O. Box 740256, Atlanta, GA 30374-0256.
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See our guide on;how to dispute your TransUnion credit report for details.
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Report Credit Repair Fraud
State Attorneys General
Many states also have laws regulating credit repair companies. If you have a problem with a credit repair company, report it to your local consumer affairs office or to your state attorney general .
Federal Trade Commission
You also can file a complaint with the Federal Trade Commission. Although the FTC can’t resolve individual credit disputes, it can take action against a company if there’s a pattern of possible law violations. File your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.
Gather Materials To Dispute Errors
Your goal is to make it as easy and quick as possible for investigators to confirm that your complaint is valid. Depending on the error,;the things you gather to support your case could include:
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Copies of credit card statements or loan documents
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Copies of bank statements
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Copies of birth or death certificates, or a divorce decree
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If you’ve reported identity theft, include a copy of your FTC complaint or police report.
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Do Your Research & Check All Credit Reports
To get details on your collection account, review all of your credit reports. You can do this by visiting AnnualCreditReport.com. Normally, you can only get one free copy of each report annually. However, due to the Covid-19 pandemic, you can check your reports from all three credit bureaus for free weekly until April 20, 2022.
Your credit report should list whether the collection is paid or unpaid, the balance you owe and the date of the accounts delinquency. If you dont know who the original creditor is and its not listed on your report, ask the collection agency to give you that information.
Afterward, compare the collection details listed on the credit report against your own records for the reported account. If you havent kept any records, log into the account listed to view your payment history with the original creditor.
Will Removing Negative Information Fix My Credit Score
Often, negative entries whether accurate or inaccurate lower your credit score and prevent your score from increasing over time.
But every consumers situation is unique. Inaccurate information may not be your credit scores only problem. If thats true, its deletion may not achieve the immediate results youre looking for.
In this case, youll need a more holistic approach to credit repair a way to develop better habits with your lenders so your score can increase organically.
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Dispute The Information With The Credit Bureau
Initiate a claim directly with the credit bureau by writing a dispute letter. The purpose of this letter is to inform them of what information you believe is inaccurate.
The Fair Credit Reporting Act requires creditors to report accurate information about every account. This means they have a legal obligation to review your claim, investigate and respond. This process will be free of cost and can take up to 30 days to complete.
You can begin a dispute with any one of the credit bureaus through their websites or via mail. The leading credit reporting agencies are Equifax, Transunion, and Experian. Its important to have documentation and to be precise about the information you are challenging.
After receiving the initial claim, the credit bureau will contact the source of the erroneous information and dispute it on your behalf.
Each of the three major credit bureaus has an online section dedicated to walking consumers through the process of disputing a claim online. You must dispute the entry with each of the credit bureaus to make sure the removal is complete across the board.
How to file a dispute letter: