Cleaning up Your Credit

Past credit problems and mistakes can come back to haunt us when we’re in a position to seek credit later in life. Sometimes the mistakes of our youth can cause problems in our later years and must be dealt with when we want to finance a new car, buy a home, or obtain a credit card. There is a right way and a wrong way to attempt to clean up your credit.

No Quick Fix

The most important thing to understand is that there is no quick and easy way to correct your credit. Any company that is advertising a way to clean up your credit with the wave of some magic wand is peddling magic beans. Remember that giant beanstalks leading to castles in the sky only grow in fairy tales. Don’t fall for the claims made by these con artists.

If you really want to address your credit concerns, you’ll need to obtain copies of your credit report from all three of the major reporting agencies. These are Trans Union, Equifax, and Experian. Fortunately in the internet age, obtaining these copies is as easy as going to the companies’ websites. Take a look at what is and isn’t on the reports and prepare to deal with anything negative.

You should have a pretty good idea of what negatives are on your report. You know what bills you paid and what you didn’t. Keep in mind that the Fair Credit Reporting Act dictates that most negatives can remain on your credit report for a maximum of seven years from the time you last acknowledged the account. If you have a bill from six years ago that you can’t fathom how you will ever repay, it may be best to let it go and wait it out. Simply making a good faith payment to an old account can keep it on your report for another seven years.

The only way to address more recent items is to pay them. An account that has defaulted or been charged off will still be negative if it’s paid off late, but a satisfied account looks better than an ignored one.

If there are items on your report that you believe are incorrect, they can be disputed with the reporting company and the reporting agency. The process for doing so will be available on the reporting agency’s website.

Once you take the steps to clean your credit, you need to do everything you can to keep it that way.

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