The Fair Credit Reporting Act which was passed by Congress says that an item can remain on your credit report for a maximum of seven years. It also says that you can dispute any item you feel is inaccurate and if that item is not verified by the lender then it must be removed from your report.
The first step is to get your report from all three major bureaus. Surprisingly, your record can vary from bureau to bureau. Next, identify the negative items and then dispute them.
How to Dispute Negative Items
You can do this yourself by writing a dispute letter to each bureau. In this letter you must include; your name, dates, reason for dispute, and any pertinent information you have regarding the item. Typically you will get a response that says you do not have all the necessary information.
Unfortunately this is a common tactic used by the major bureaus. In fact they have faced a multitude of fines over the years for not complying with the Fair Credit Reporting Act; one of the most notable being in 2000 all the credit bureaus paid $2.5 million FTC fine for blocking millions of phone calls from consumers.
Why? The credit bureaus contrary to popular belief are not government agencies. Instead they are private businesses with some of the biggest profits in our economy. According to TransUnion in 2011 they had reported a revenue of $245.9 million for the first quarter. That equals an estimated annual revenue of $983.6 million, for just one year for just one credit bureau!
They make their profits by selling your information to businesses. There is no profit motive for the bureaus to make sure the information they have about you is accurate or not. Thus, it costs them money to investigate a disputed item. That is why you will typically get a letter responding with a request for more information, be it needed or not.
The bureaus have found that this is an effective method at discouraging you and frustrating you into giving up on clearing your credit report. This is also when and why many people turn to a credit repair service to do it for them.
If you chose to do it yourself or hire a service the bottom line is you can remove negative items. You can clear your credit history and build a new positive record. The Fair Credit Reporting Act says that an item can remain for a maximum for seven years; there is nothing about a minimum amount of time an item must remain!
Take action today and stop being embarrassed by past financial mistakes. You are not alone, and will not be alone when removing these negative items.