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Dealing With a Bad Credit Report

(continued from Steps 1-3)...

4. Clean up public record information: Information in your public record can sometimes be the most damaging. This includes arrests, convictions, judgments, foreclosures, tax takings, and liens. The best way to remove such information is to start at the source – with the government agency providing the information to the credit bureau. For instance, you might come to an agreement with your creditor to remove a default judgment against you if you enter into a repayment plan. The court will remove the default, you can dispute the information in your report, and the credit bureau will have to remove it.

5. Delete old information: Most bad information has to be removed from your report after a certain number of years.

After 7 years
• Accounts sent for collection or charged off.
• Lawsuits and judgments.
• Paid tax liens.
• Most criminal records.

After 10 years
• Bankruptcies.

Forever (may be reported indefinitely)
• Criminal convictions.
• Positive information.

6. Explain damaging information: You can send a statement to the credit bureaus explaining damaging items. Now, they are not required to include the statement in your report, but they might agree to do so. For example, if you were sick and unable to work, and your creditor agreed to postpone your payments, then the bureau must include a statement as such. Keep your statement short. You can also explain your delinquency to your lender directly. Federal law requires that creditors at least consider your explanation.

7. Avoid overreacting to threats: Creditors may threaten to report negative information to the credit bureaus, but this is just meant to pressure you to pay. In reality, that information is automatically reported every month no matter what. If the threat is coming from a collection agency, the threat is even less likely to make a difference. That information is also automatic. Furthermore, these threats are probably illegal under the Fair Debt Collection Practices Act. You can sue the collection agency under that statute. This law does not apply if a creditor itself is making the threats.

8. Avoid credit repair agencies: Avoid companies that promise to fix your credit report for a fee. These agencies usually cannot deliver on their promises. You can do a better job yourself by following the tips above, and finding other resources to help you. 

If you find that you have a lower credit score than you expected due to excessive debt, contact ACCC for help. When you contact our approved credit counseling agency, a certified credit advisor will help you evaluate your current financial situation and provide you with personalized debt solutions based on your goals.

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling agency offering services such as debt advice, debt consolidation programs, and consumer bankruptcy counseling. We have provided thousands of families with financial counseling and helped them with consolidating bills and paying off credit cards. For consumers in need of bankruptcy counseling, ACCC is approved by the Department of Justice to provide both pre bankruptcy credit counseling and post-bankruptcy debtor education.

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