The Fastest Way to Improve Your Credit Scores

Derogatory information is information in your credit history that lenders may legally use to turn down a loan request or application for credit. Derogatory information includes such things as bankruptcies, late payments, unpaid parking tickets and previously charged off loans.

Removing derogatory credit information from your credit reports is the fastest way to improve your credit scores. Credit bureaus are known for the amount of inaccurate information in credit files. However unless you check your report fairly regularly, you may not even realize that you have derogatory information in your file until you start getting turned down by credit companies, mortgage brokers, or financial institutions. As a general rule, derogatory information remains on your credit report for seven years; however bankruptcies can remain for as long as 10 years. Information about criminal convictions normally has no time limit.

Your credit score is the first thing that lenders look at to check if the score is low or for anything that might make it difficult for you to repay the loan that you are seeking. You can take control over the information that appears in your credit file by getting rid of the inaccuracies and the negative items, and you don't need to spend money on a credit score expert to do so. Under the Fair Credit Reporting Act, both the CRA (Consumer Reporting Agency) and the organization that provided the information to the CRA, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. By law you may obtain a free copy of your credit report once a year from each of the three credit agencies: Equifax, Transunion, and Experian. You can request your report from each by locating them online, or you can request a report from all three agencies at one time by sending your written request to the Annual Credit Report Request Service at PO Box 105281, Atlanta, GA, 30348.

The next step would be to dispute every item in the report that is incorrect with the aim of getting them removed. What you will need to do is write to the respective credit bureaus disputing the inaccuracy of the entries. Begin by telling the CRA in writing what information you believe is inaccurate. If you have any documentation to support your claims such as credit card statements and canceled checks, include copies of any such documents. Do not include originals.

Provide your complete name and address, and the letter should clearly identify each item in your report you dispute. You should clearly outline the facts and elaborate on why you are disputing the information. Finally, request deletion or alteration of the information. This is important. You can enclose a copy of your report with the items in question circled in red. Your letter may look something like the one below. Be sure to send your letter by recorded delivery and request a return receipt so you can document what the CRA received. In addition, you should keep copies of your dispute letter and enclosures.

Sample Dispute Letter:

Date
Your Name
Your Social Security Number
Your Address
Your City, State, Zip Code
Complaint Department Name of Credit Reporting Agency
Address City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also circled on the attached copy of the report I received. This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.
Enclosed are copies of (use this sentence is applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing)

The credit bureau is obliged to contact the creditor to check on the item that is being disputed. This will work well in your favor. If the bureau is unable to verify the accuracy of the information in your credit report within 30 days, they must delete the entry from the credit report completely. If the credit bureau does not receive notice back from the creditor in thirty days that your dispute has been denied, removing the disputed information from your report is automatic. When the investigation is complete, the CRA must provide you with the written results and a free copy of your report if the dispute results in a change.
Finally, you can only file genuine disputed claims since the Fair Credit Reporting Act gives credit bureaus the authority to disregard any frivolous disputes. This is the case if they are not convinced that you are serious about removing erroneous information. This law was initially put in place to protect legitimate claims from errors that are as a result of data entry. With prompt and informed choices concerning credit card use, you would be surprised how easy it is to remove any derogatory information from your credit report.

Jide Pearce writes for http://www.DebtSolutions-R-us. DebtSolutions-R-Us.com has been created to help people in serious debt get good, honest, impartial advice. Readers will learn the steps to take to become completely debt-free and stay debt-free. This week DebtSolutions-R-Us addresses the topic, how to Get out of Debt. .