How to Remove Debt From My Credit Report

The debt found in your credit report can turn you into a prisoner. The reason for this analogy is when you have debt, you do not have the freedom to use your money the way you would like, so essentially, you are being held captive by your credit obligations. However, the restrictions that debt imposes on your finances were created by you. In order to reduce the restrictions put forth by your credit obligations, you need to rid your credit report of outstanding debt.

Instructions

1

Determine the amount of debt on your credit report. Before you can remove debt from your credit report, you need to determine the amount of debt that you have. To do so, you need to order your actual credit report. Under the Free Disclosure Rule of the Fair and Accurate Credit Transactions Act, which is more commonly called the FACT Act, you have the right to view a copy of your credit report from all three of the major credit reporting bureaus, TransUnion, Experian and Equifax, for free every year. See resources for the direct link to the website where you can obtain your credit report.

2

Dispute any mistakes on your credit report. If you find any debt-related errors on your credit report, you need to dispute the erroneous information so the information can be removed. For example, if there is debt on your credit report that does not belong to you, or if you have satisfied a particular debt but it still appears on your credit report as unpaid, you can dispute the inaccurate information. The credit dispute must be done in writing and sent to the credit reporting bureau that has the inaccurate information. The addresses to each credit reporting bureau and a sample copy of a dispute letter can be found on the Federal Trade Commission website.

3

Pay off any remaining debt. After you have correctly identified the correct amount of all your debt, you need to pay the debt off. The amount of money you owe creditors is more commonly referred to as your "credit utilization ratio." Your credit utilization ratio accounts for 30% of your credit score so if you pay off all of your outstanding debt, your credit score will increase.

4

Negotiate the removal of any negative information. If you pay off a delinquent account that appears on your credit report, the creditor is not obligated to remove the negative information. However, in most cases, delinquent accounts are handled through a third-party debt collection agency. You may be able to negotiate with the third-party collection agency to have the negative information removed from your credit report if you pay the outstanding debt.

5

Do not create any new debt. Once you have paid off all of the debt on your credit report, you may be tempted to use your credit again; however, in order to keep your credit report free of debt, you should refrain from creating any new debt.