The Best Way to Clean Credit Report

Cleaning your credit report requires waiting for a long time or some spare cash to pay off any creditors that you have late or delinquent accounts with. Paying off your debts in full will also restore your credit rating, but settlements can get you the same result for a lower cost. Monitor your credit report as well, so you can dispute any errors that may come up and be made aware of any accounts that may be late.

Paying Obligations

Paying your debts in full is one of the best methods to clean up your credit report quickly, but it is the most expensive. If you're paying a late or delinquent account, make sure that you secure an agreement for a "pay for delete" in writing to get the most benefit to your credit report for your money. If you can't get that condition in an affordable manner, request that the account be marked "paid in full" instead.

Settlement Solution

Settling your debts is an option that only becomes available once your accounts are 60 days or more late or have been sold to collections agencies. If you have late or delinquent debts, contact the current owner of the debt (listed on your credit report) and ask for a "pay for delete" in return for an amount of money less than the total obligation. Set your starting offer at 10 percent of the total value and move up from there if you need to. If you get a "pay for settlement" it will harm your credit rating more than a "paid in full" entry. A deleted entry is the best possible outcome for your credit rating.

Play Waiting Game

You may also choose the alternative of waiting for your debts to fall off your credit report. Delinquent debts will fall off your credit report after seven years and cease affecting your score. During this time, your creditors may sue you for collection until the statute of limitations on the debt expires. These statutes differ depending on the state from which the loan was made. Attend any court dates that you may be required to so you can avoid a default judgment against you. Settle the debt in writing with any attorneys representing your creditors. If your debts are relatively small or your creditors overlook you, you may be able to avoid being sued for them.