The Fair Credit Reporting Act (FCRA) gives you the right to dispute inaccurate negative items on your credit report, but you don't have a right to remove accurate items. Yet, there still may be some things you can do about negative items even when they are accurate. This article will discuss what you can do about negative items on your credit report and how to find and dispute inaccuracies on your credit reports. We’ll also touch on requests to remove items through pay-for-delete negotiations and goodwill letters.
Written by Attorney John Coble.
Updated September 18, 2021
The Fair Credit Reporting Act (FCRA) gives you the right to dispute inaccurate negative items on your credit report. You have a right to good faith disputes. If you prevail in the dispute, the credit bureaus must remove the item from your credit reports. You don't have a right to remove accurate items. Yet, there still may be some things you can do about negative items even when they are accurate.
This article will discuss what you can do about negative items on your credit report and how to find and dispute inaccuracies on your credit reports. We’ll also touch on requests to remove items through pay-for-delete negotiations and goodwill letters.
What’s the Best Way To Remove Negative Information From My Credit Report?
There are no magical solutions to remove all negative items from your credit report or increase your FICO credit score. If you’ve read about such a solution on the internet, don’t believe it. If it sounds too good to be true, it probably is. Your ability to remove negative information will depend on whether it’s accurate or not. The fact is creditors and credit bureaus have no obligation to remove negative items from your credit report if they’re accurate.
The FCRA was enacted to ensure accuracy, fairness, and privacy in consumer credit reporting. This is why the law backs you up in having inaccurate items removed from your credit report and why it’s difficult to have accurate items removed.
There are a couple of things you can do to remove inaccurate negative information from your credit history. First, the FCRA gives you the right to dispute the inaccurate information with the credit reporting agency and/or the creditor. Creditors are businesses such as credit card issuers and student loan lenders. You should dispute the debt with the credit reporting agency first. Second, you have the right to have the collection agency verify the debt under the Fair Debt Collection Practices Act (FDCPA). If the collection agency can't verify the debt, they can't keep it on your credit report.
What if the information is accurate? You can write a goodwill letter, asking the creditor to remove the item. Or if the account has gone to collections you can try to negotiate payment in return for the deletion of the collection account. These requests will probably not work but are worth trying since they could help your credit score. This will be discussed in more detail below.
How Do I Get Inaccurate Negative Items Removed?
Removing errors from your credit report can help improve your credit. The first step to removing negative inaccurate items from your credit history is to find them. You do this by getting your free credit report from all three of the major credit bureaus (Experian, Equifax, and TransUnion). You have the legal right to get your report from all three bureaus once per year for free. In response to the coronavirus pandemic, the three reporting agencies are allowing consumers to access their credit reports once a week for free through April of 2022. You can also enroll in fee-based credit monitoring services from the three major bureaus, which include additional access to your credit report and credit score.
Once you have your credit reports the next step is to check each of them for errors. It’s important to check all three reports because they may contain different information. Many lenders report to all three agencies, but some do not. What are you looking for? Start by looking at your personal information. Ensure your name, address, and phone number are correct. Ensure there are no accounts listed with a similar name that belong to someone else. This can happen if personal identification information is not carefully checked by the credit reporting agency.
According to the Consumer Financial Protection Bureau (CFPB), these are the other most common credit report errors:
Accounts opened due to identity theft
Accounts reported incorrectly as delinquent
Incorrect last payment date or wrong opening or closing date
Accounts where you're listed as the owner when you're only an authorized user
Same debt listed several times
Items that were disputed and removed but are back
Incorrect current balance
Incorrect credit limit
Once you find these errors, you should use one of the following methods to get these inaccurate items removed. Doing so will help your credit score.
File a Dispute Letter With the Credit Bureau.
The FCRA requires credit reporting agencies to investigate any item you dispute on your credit report. They generally have 30 days to investigate and five business days after they complete the investigation to tell you the results. If you provide more evidence during the 30-day period, the investigation can be extended 15 days. Also, if you’re disputing an item on your free annual credit report, a CFPB rule gives the reporting agencies 45 days to investigate. After the credit reporting agency receives your dispute letter, they must contact the creditor or collection agency that provided the erroneous negative item. This entity is called the furnisher.
You can dispute an item on your credit report online, by phone, or via mail. The best option is to submit a dispute letter via certified mail with a return receipt. This gives you proof of when the reporting agency received the dispute letter, so you can hold them to the 30-45 day investigation timeline. Though you can file a dispute by phone or through the credit reporting agency's website this is not a good idea because it doesn’t provide the same paper trail.
The letter itself should detail your claim. Start by listing the account number and creditor’s name and explaining the error. Include a copy of the page of the credit report with the disputed item highlighted along with any accompanying documents to support your position. For example, if your report's payment history is showing a past-due or missed payment, you might include a canceled check showing the payment was made. The CFPB and the Federal Trade Commission (FTC) provide excellent information on what to include in these dispute letters. They also provide templates along with the forms the credit bureaus use.
Keep all your original supporting documents and send copies to the reporting agencies. Your letter should also be accompanied by your own identifying information, including your Social Security number and a copy of a government-issued picture ID. The credit dispute letter should be mailed to each of the reporting agencies that contain the erroneous item. Their addresses are:
P.O. Box 4500
Allen, TX 75013
TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19016-2000
Equifax Information Services, LLC
P.O. Box 740256
Atlanta, GA 30374-0256
If the dispute results in a correction to your credit report, you have up to 12 months to get a second free credit report through AnnualCreditReport.com. It may be a good idea to wait a few months to get this free report. This should allow enough time to make sure the creditor's automated system hasn't reinserted the erroneous item.
File a Dispute Letter With the Lender or Collection Agency Directly.
Since you’ve already prepared a dispute for the credit bureau, this step should be easy. The best practice here is to send a dispute letter to the credit reporting agency and send a copy to the creditor or collection agency. This way, you're preparing the strongest case against both the creditor and the reporting agency should they refuse to remove an erroneous item. Send both disputes via certified mail with a return receipt.
Lenders and collection agencies must investigate and respond to your claim just like the credit bureaus have to. Follow a similar process by detailing your dispute in a letter, including copies of supporting documentation, and sending copies and retaining the original documents. Ensure the lender or collection agency acts within the legal timeline and follow-up with their actions.
Hire a Credit Repair Company To Work on Your Behalf.
Credit repair companies can't do anything that you can't do yourself. But if you have a lot of errors on your credit report and you're pressed for time, it may make sense to hire a credit repair company to dispute errors on your behalf. If you only have a few errors to fix, you can save money by sending the dispute letters yourself. If you do decide to hire a credit repair company (also known as a credit restoration company), it's a good idea to know your rights under the Credit Repair Organizations Act (CROA).
Research the company you’re considering hiring and make sure it is reputable. Many credit repair companies are scams. The following red flags indicate a credit repair company is a scam:
They insist on up-front payments.
They tell you to dispute accurate information on your credit report.
They tell you to give false information on loan applications.
They don’t explain your legal rights under CROA and FCRA when they tell you what they can do for you.
As with any financial services company, whether it be a credit repair organization or a nonprofit credit counseling agency, it's prudent to do some research. These people are handling your money and credit, so you need to be careful. The easiest place to check on a company is internet reviews. The next place to look is the Better Business Bureau and the CFPB complaints database. You can also check with your state attorney general's office.
Work With a Credit Counseling Organization.
If you don't feel comfortable handling the credit dispute yourself, the best place for assistance is usually a nonprofit credit counseling agency. They provide credit counseling services for free. There is sometimes a fee for add-on services, which may apply to credit dispute resolution assistance. Credit counselors differ from credit repair companies in that they don't do the disputes for you. They help you understand how to handle disputes. That's why even if they charge a fee, it will usually be significantly lower than a for-profit credit repair company’s fee.
Again, make sure you're dealing with a reputable credit counselor. One sign that you have a good counselor is if they're a member of the National Foundation for Credit Counseling (NFCC). The NFCC has strict requirements for its members to make sure you receive the service you need.
Is There Any Hope for Removing Accurate Information That’s Negative?
There are a couple of ways you can try to get accurate negative items off your credit report, but these methods rarely work.
Pay for Delete
You can try to negotiate a pay-for-delete settlement if a debt has been verified and sold to a collection agency. In a delete letter, you propose to pay off the account only if the collection agency will remove the negative item from your credit report. This is more likely to work with collection agencies and debt buyers because they have more incentive to agree to a settlement since their whole business model depends on successful collections. It's less likely to work with an original creditor since they'll sell the debt and take a tax write-off if they can't collect.
Still, it’s not likely a collection agency or debt collector will agree to a pay-for-delete settlement. These entities have contracts with the credit bureaus that forbid such practices. Also, a pay-for-delete agreement may violate the FCRA's requirement for accurate credit reporting. Even if you're successful in negotiating a pay-for-delete agreement with a collection agency, the negative mark from the original creditor will stay on your credit report. Those original creditor late payment marks don't disappear just because they assign or sell the debt to a debt collector.
Goodwill letters are the main method to get original creditors to remove accurate derogatory items. A goodwill letter is used for paid debts or small issues like late payments you’ve since gotten current on. It's a humble request asking the creditor to remove the negative mark. They might do this if you have a good reason, like unemployment, for the negative remark. You'll also need to show how you're back on track and that the negative mark is harming you in some way. For example, you may be harmed by not being able to refinance a mortgage at a low enough interest rate because of the negative mark.
The creditor has the discretion to decide if they’ll remove the item in response to a goodwill letter. The odds are against you, but it doesn’t hurt to ask. Whether it's a pay-for-delete negotiation or a goodwill letter, never alert the credit bureau that you're doing this. The reporting bureau will provide no help in removing accurate negative information. You'll have to deal with creditors, collection agencies, or debt-buyers if you want to remove accurate information from your credit report.
You have the legal right under the FCRA to dispute inaccurate information on your credit report. It's a good idea to review your credit reports at least once a year and exercise your rights when you find errors. Remember that you don't have a right to remove negative information that's accurate. Still, you can ask a creditor to remove the accurate information by writing a goodwill letter or negotiating a pay-for-delete settlement.
Usually, when the information is accurate you'll have to wait out the 7–10 years it takes for the item to fall off your report. The good news is these accurate negative entries will count less and less against your credit score as time goes by.