You may ask whether credit bureaus remove negatives from your credit report. Fact: credit bureaus will never remove accurate information from your credit report. You might try a strategy to persuade the reporting creditor to remove the information. The two most common are a goodwill letter or a “pay for delete” request.
The Purpose of Removing Negatives from Your Credit Report
Removing negative information from your credit history is one of the best ways to improve it and increase your credit. Negative information, reflected in your FICO score, includes your past financial mistakes detailed on your credit report. For example, you frequently late payments to your credit cards. However, it can also reflect errors on the part of the reporting agencies or the creditors reporting your credit information.
Here are three common errors that need to be removed:
- a report of someone else’s information mistakenly appearing in your file
- an expired collection account
- an account on which you made late payments before paying in full more than seven years ago. (The credit bureau should have purged this from your file after seven years.)
Disputing Inaccurate Information
The Fair Credit Reporting Act (FCRA) gives consumers the right to dispute inaccurate information with the reporting agencies or reporting creditor. Once the bureau receives your dispute, they have 30 days in which to investigate the claim with the company or creditor that provided the information. Once the investigation is complete, the bureau must immediately remove the information if your claim is found valid. You will need to dispute the information on each bureau where it appears. Credit bureaus do not share information on claims, nor will one report to the other when you file a dispute.
The process of disputing errors on your credit report is simple. You can file your dispute online or through the mail. Whichever method you choose, you must provide documentation for your claim, including a copy of the credit report showing the inaccuracy. You may also submit a dispute over the phone, but you will still need to provide additional information either online or by mail.
How to Submit a Dispute
You can obtain a free copy of your credit report every year by law. One source is annualcreditreport.com. You can download and print it out, or for a small fee you can request a copy from each reporting agency. Once you have a copy of your credit report, submit it to each bureau—TransUnion, Equifax, and Experian. The easiest and quickest way to submit a dispute is online.
If you prefer to mail your dispute, you will also need to send a letter with your request (the Federal Trade Commission has a sample letter for your reference). Ascertain you have the correct mailing address and make sure to send the letter by certified mail. You can also file a dispute directly with the creditor that is reporting the inaccurate information. They must investigate your claim, and if it is valid, they must request the removal of the information from your report.
Can You Remove Negative Information That Is Accurate?
None of the three major bureaus will remove accurate but negative information from your credit report. You can attempt to persuade creditors to remove those items from your report. Two of the more common strategies are submitting a goodwill letter and what is called pay for delete.
- When you submit a goodwill letter, you appeal to the creditor’s compassion and use your good relationship with them to ask them to remove the information.
- A pay for delete strategy allows you to negotiate an agreement with the creditor whereby you pay the account in full. In exchange, the creditor agrees to delete the negative information.
Success Rate of the Goodwill Letter or Pay for Delete Strategy
Neither the goodwill letter nor the pay for delete strategy has huge success. Most creditors are reluctant to violate the agreement under FCRA that requires them to report complete and accurate information. In some cases, success with either strategy depends upon who reviews your request and what kind of information you want deleted. If the creditor is willing to accept your request, an agreement in writing is essential, especially if the account is in the hands of a collection agency.
The surest way for removing accurate but negative information is to sit back and wait for it to expire. The majority of negative information remains on your credit report for seven years. On the other hand, a bankruptcy on your credit report can remain for 10 years before the credit bureau must purge the information. Remember that negative information has less impact as it ages. The older it is, the less it impacts your credit score.
Strategies and Actions to Avoid
While the above strategies have limited success, paying a credit repair company to remove accurate information is doomed from the start. Not only will you lose your money, but the information you paid the company to remove will still be on your credit report. When choosing the right credit restoration company research is essential.
Avoid any company that requires you to pay a fee for them to submit a dispute. Filing a dispute yourself incurs no fee, and if you need help, credit counselors are available to help you. Check to make sure the counselor is from an NFCC member agency. You can visit in person, talk over the phone, and possibly handle the issue online. Find more information about NFCC counselors by visiting https://www.nfcc.org/resources/blog/ask-expert-remove-negative-remarks-credit-report/.
How Do You Ask for Goodwill Deletion?
A goodwill letter is sometimes referred to as a forgiveness removal letter. In short, it is a letter nicely asking your creditor to remove a negative item that appears on your credit report. Although creditors have no obligation to agree to your request, it never hurts to ask and has no effect on your credit.
Your chances of success are greater if your current relationship with the creditor is in good standing. It also helps your case if you have made your payments on time for many months following the missed or late payments. If you often make payments late, creditors are unlikely to agree to remove negative information from your credit report.
The Best Way to Write a Goodwill Letter
You can also submit a goodwill letter to request the removal of a closed account. Removing closed accounts containing substantial late payments or collections activity could provide a boost to your credit score. However, if the closed account contains no negative marks, removal may work against you by lowering your credit score. Each closed account decreases the amount of your available credit, which impacts your credit use ratio and credit score.
The tone you use when writing a goodwill letter is important. Think of the person on the other end of your correspondence. Use a friendly, calm tone that projects kindness and respect. After all, you want to encourage the creditor to have compassion and the desire to forgive any past credit mistakes that occurred.
First, explain to your creditor why you feel the negative information should be removed. It helps to explain the circumstances that caused you to miss or make late payments. Everyone makes mistakes, and the person reviewing your case may have sympathy for your circumstances.
Take responsibility for your mistakes but avoid going into too much detail about the circumstances related to the delinquency. Be short and concise. A couple of paragraphs including these details are best:
- Date of your letter
- Your name and address
- The name and address of the creditor
- Your account number(s)
- The negative entry you would like them to remove
- Which credit bureaus need to remove the negative information
What Is a “Pay for Delete Offer?”
Pay for delete means you negotiate with the creditor or his representative to remove collections from your credit report. Here’s how it works. You may have an account with an unpaid, delinquent balance on your credit report. You offer to pay the account in full in exchange for permanent and complete removal of it from your credit report.
While not all creditors will agree to do this, some will. A creditor may even accept partial payment in lieu of the entire balance. A collection agency may suggest this strategy, but you should never agree to pay for delete this way. Some companies make promises they have no intention of keeping just to get you to pay. You should only attempt this kind of negotiation between yourself and the original creditor. Make sure you get the agreement in writing before you make any payment.
What Is a 609 Letter?
A 609 Dispute letter refers to Section 609 of the Fair Credit Reporting Act (FCRA). It is based on the credit bureaus’ responsibility to report only information that is verified. It does not concern your right to dispute information that appears in your credit report or the obligation of the credit bureau to investigate any disputes that consumers file.
The FCRA contains no reference to “609 Dispute Letter.” It does cover a substantial amount of information regarding your right to dispute information in your credit report, not in section 609, but in 611. It states that unverified and unconfirmed information must be deleted.
Most consumers send dispute letters to the three major reporting agencies—TransUnion, Equifax, and Experian—because they believe there is inaccurate information in their credit file. Consumers often discover a problem when they are denied a loan or other credit. They may also find it when regularly checking their own credit and find an unrecognized account.
The premise behind the 609 dispute letter is this: if the reporting agency cannot produce the information related to your dispute, they must remove the disputed information. The information is considered unverifiable. Under FCRA, consumers are only entitled to all information accessible in the agency’s system. Inaccessible information might include items such as a signed contract or proof of payments applied to your account.
What Is the 609 Loophole?
Some consumers believe the 609 dispute letter is some type of legal loophole that requires credit bureaus to delete certain negative information from consumer credit reports. You can spend a lot of money buying templates of those “magical” letters, only to discover there is no secret way to remove accurate negative information from your credit report. FCRA requires no such thing
A letter, no matter how nicely written, cannot guarantee a reporting agency will remove accurate and verified negative information. There is also nothing to stop the reporting agencies from reporting negative information that is both accurate and verifiable. The agencies can remove your disputed information during their investigation, but have the right to place it back on your file if verified as accurate at a future date.
Points to Think About
People often worry about what may be on their credit report, especially those who have experienced issues with late payments. The most common areas of concern are negative items resulting from evictions, back rent, foreclosure, bankruptcy, and repossession. Other areas of concern are credit cards in default, other seriously delinquent bills, and utilities, with cable bills appearing high on the list of concerns.
They become more concerned when they are turned down for credit, especially for a mortgage or a rental home. They may look to the reporting agency for a solution or seek help from another source. This may lead them to submit a 609 dispute letter. They assume the letter entitles them to all the information related to their unpaid loan, credit card, or other bill. However, they are only entitled to what is available in the files of the reporting agency.
People mistakenly believe they once they dispute every negative mark, the credit bureau must remove them. While they must remove information in dispute during the investigation, if it is later verified and confirmed with the creditor to be accurate, it will reappear in the consumer’s file.
You Should Only Dispute Inaccurate Information
Does this mean you shouldn’t dispute inaccurate information you find in your credit file? Of course not. You should, however, not dispute entries you know to be accurate. Instead, you need to work with the creditor to develop a repayment plan. Write a goodwill letter or request a pay to delete offer. Both options are more beneficial than attempting to remove accurate negative information.
Unless you can provide documentation to support your dispute, credit bureaus have no obligation to open a claim and investigate. Conversely, if the creditor cannot prove you owe the money, the credit bureau must remove it as unverified.
Finally, before you file a dispute, make sure you have the documentation necessary to justify your claim. Failure to provide the proper documentation will result in the reporting agency denying your request to investigate. Last but not least—don’t make frivolous claims attempting to improve your credit score. It will eventually catch up with you.