How Is Bad Credit Removed From My Credit Report?

Negative entries such as charge-offs and repossessions can remain on your credit report for up to seven years. A bankruptcy can remain for as long as 10 years. By law, the three major credit reporting bureaus--TransUnion, Experian and Equifax--must remove outdated negative information, according to the Fair Credit Reporting Act. However, federal law gives you the right to challenge any information on your credit reports, and that information must be removed within 30 days if the credit bureau cannot verify its accuracy.

Misconceptions

So-called credit repair agencies advertise that they can clean up your credit by removing negative information, but that's often wishful thinking. There are no legal grounds for removing negative information from your reports unless it is outdated or incorrect. The Federal Trade Commission advises that you should stay clear of credit repair firms and work directly with the credit bureaus through a disputes process if you think information on your report is inaccurate.

Benefits

Removing negative entries from your credit reports could cause your credit scores to increase, making it easier for you to obtain credit and qualify for loans at lower interest rates.

Time Frame

Those benefits are among the reasons some consumers challenge information on their reports even though they know that it is accurate. The Federal Trade Commission says the burden of proof is on the credit bureaus. When you file a dispute with the credit bureaus, the credit reporting agencies immediately contact your creditors to verify the information. Time is often on your side, because creditors have to respond to the credit bureau within the 30-day window. If they don't respond in time, the credit bureau must acknowledge that the negative information could not be verified and is being removed from your report. On the other hand, negative information that is confirmed remains on your report.

Potential

The disputes process is a common tactic used by credit repair agencies. You can take the same action and potentially gain positive results. It is common for some credit repair firms to simply dispute multiple entries at once in hopes that the original creditors will not verify all or most of the information. You can dispute entries in your credit reports by writing the individual credit bureaus or contacting them through their websites. Also, by law, you are entitled to free copies of your credit report every 12 months from each of the three major credit bureaus. You can get free reports at AnnualCreditReport.com.

Warning

The Federal Trade Commission says credit bureaus can ignore frivolous disputes. For example, a letter from you challenging previously confirmed information might be considered frivolous.