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Want accurate, negative info off your credit report? Good luck

By

Credit Score Report
Reporter Jeremy M. Simon
Jeremy M. Simon is a former staff reporter for CreditCards.com who covered credit reporting and scoring issues.

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Question for the CreditCards.com expert

Dear Credit Score Report,
I live in Cincinnati, and my fiancee and I had a couple rough years back in 2006, causing us to have delinquent bills. It affected our credit score drastically. We are now debt free and are in the process of trying to purchase a home. Our credit scores just aren't ready yet, and my question for you is: Is it possible (legally) that a creditor could delete our negative credit listings if I ask them or give them a decent reason to do so? Is it something that is possible, or is it mandatory that it has to stay listed on your report for at least seven years? Thank you so much. -- Nicole

Answer for the CreditCards.com expert

Hey Nicole,
The banks and credit bureaus probably aren't susceptible to flattery, threats or deliveries of mail-order 3-Ways from Skyline Chili. As a result, you probably have a few more years before those missed payments come off your credit reports, allowing your credit scores to fully recover from those past mistakes -- and enabling you to buy a home.

It's great to hear that you've been able to bounce back financially after some tough times, even if your credit reports still include those past delinquencies. Now that you've caught up on missed payments -- and eliminated your debt -- you've surely taken on a new, favorable appearance in the eyes of your lenders. And while it's legally possible for banks to delete missed payments from your credit reports before the full seven years have passed, experts say they are unlikely to fulfill such requests, even if your lenders really like you. "Some debt collectors may agree to remove a negative item if the consumer pays the collector off -- a practice sometimes called 'pay for deletion.' Original creditors are unlikely to do that," says Chi Chi Wu, staff attorney with the National Consumer Law Center. Don't expect the credit bureaus to help out, either. Industry reporting standards require the inclusion of complete, accurate information on borrowers. "If these things are deleted, then really the whole scoring system breaks down eventually," says Jennifer Maisano, president of credit reporting compliance firm Credit Bureau Strategy Consulting. 

Of course, you can still plead your case, since the law doesn't prevent the removal of those delinquencies. The law that applies here -- the Fair Credit Reporting Act (FCRA) -- dictates the maximum length of time items can remain on credit reports, which in the case of missed payments is up to seven years. Although it's not against the law to erase credit report items before that amount of time has passed, the credit bureaus probably won't take those negative-but-accurate items off your report. (Removing inaccurate notations from your report, however, is another matter entirely.) "Delinquencies remain for seven years from the original delinquency date of the account," says Rod Griffin, credit bureau Experian's director of public education.      

That means if you missed some payments back in 2006, those delinquencies will appear on your credit report until 2013. In other words, you've got about two more years before your credit reports are wiped clean of those past mistakes. The news isn't all bad: While you're waiting, your credit scores should continue to recover, since "the further in the past the delinquency occurred, the less impact it will have on credit scores," Griffin says.

Additionally, waiting doesn't have to mean doing nothing. "Catching up on late payments and demonstrating a positive payment history over time will also help you recover more quickly," Griffin says. I'd also encourage you to pull your credit reports from all three U.S. credit bureaus (Experian, Equifax and TransUnion) and review them. If you find any errors, be sure to dispute them, since mistakes made by others shouldn't be allowed to unfairly damage your credit.

You can also plead your case by adding a 100-word statement to your credit reports. While these letters won't change your credit scores, they give you the opportunity to explain your financial setbacks. That could help potential mortgage lenders better understand your situation when they review your credit reports.

All this means that while you and your fiancee may already be committed to a more responsible approach to borrowing, your credit scores just need some time to catch up.  

Good luck!

--Jeremy 

See related: 5 key federal laws help protect credit cardholders, Apartment security deposit dispute stains renter's credit report, Free credit reports: How to get the actual free one, How to dispute credit report errors, Decade-old credit mistakes shouldn't appear on your report, How to add a written statement to your credit report

Jeremy M. Simon is a former CreditCards.com reporter who wrote about credit scoring, economic data, credit card crime and other issues. He is based in Austin, Texas. He is a graduate of Vassar College and has previously worked for Thomson Financial in New York City, where he wrote about the stock markets, and Texas Monthly, as well as several publications in Austin.

 

Published: June 28, 2011



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