How to Clean Up a Credit Report

The information on a credit report can significantly impact your next credit card or loan application.

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Reviewing it and cleaning it up can improve your chances of approval and uncover practical ways to save money and improve your credit score. If you are wondering how banks determine your credit score, well, it's a complicated process.

Credit lenders examine your credit history when applying for loans, credit cards, and mortgages. The data on your credit report helps them evaluate your ability to pay off debts; however, any incorrect data on your records can endanger your approval rate and affect the terms you’re offered. In fact, approximately 25% of Americans have errors on their credit reports, which shows there’s a lot of cleaning up to be done. 

One of the easiest ways to get your credit report clean is simply to hire the best credit repair specialist in Dallas, such as those at The Phenix Group, who can help you navigate the tricky process of cleaning your credit–they may even be able to assist you with clearing a repossession from your credit.

How Can You Clean Your Credit Report?

1. Obtain Your Credit Report

Knowing where you stand is the first step toward getting your credit report in order, so the first step is to request your credit reports from the three credit bureaus--Equifax, Experian, and TransUnion. On AnnualCreditReport.com, you can get free weekly credit reports from these bureaus.

2. Evaluate Your Credit Report

After requesting your credit report from the major credit bureaus, check if the details listed on each one are accurate. Evaluate the following information:

  • Personal details, such as the address and name listed on your accounts

  • Account details, including credit limit, balances, current status, and payment history

  • Collection and bankruptcy information, including whether any of your accounts were listed overdue for over a month and sent to a debt collector or collection agency

3. Dispute Any Inaccuracies

Start the dispute process immediately if you encounter any discrepancies in your credit reports with the bureau that has the incorrect information; you can do this via email or online. If the dispute settles in your favor, the bureau must report the matter to the other two credit bureaus. Nonetheless, you should also notify the other credit bureaus to be on the safe side.

However, if your dispute is denied, you can take further action with CFPB or the FTC or file a written statement that can be added to your credit reports. 

4. Pay Off Your Debts

If you have credit card debt, try to pay it off, because the percentage of your total debt or the credit utilization rate you have in comparison to your total credit limit is a vital factor in your credit score. There are several ways you can repay your debt–here are three practical options:

  • Apply for a balance transfer–by transferring your balance to a credit card with an interest-free period, you can settle your credit card debt more quickly than you would by keeping your debt on a high-interest card.

  • Fund your debt with a personal loan–balance transfer credit cards require excellent credit, so you should consider applying for a collateral loan to repay your debt. Personal loans are typically helpful for larger credit card debts, and they have more accepting credit requirements. In addition, personal loans can help you keep your credit utilization rate low because they are installment accounts, while a credit card is a revolving account that affects utilization.

  • Redeem rewards–if you have accumulated points, cash back, or miles, redeem them to pay off your debts. Unfortunately, any credit you get will only cover part of your debt. 

Final Thoughts

Cleaning up your credit reports removes errors from your credit file, strengthening your credit score. To clean up your credit report, you’ll need to request your credit reports, evaluate those reports, dispute any errors, and pay off any debts. Paying off your debt, whether it’s via a personal loan or balance transfer, can also help you save money on interest rates. 

It's important to note, however, that while the above sounds straightforward, waiting on hold with credit bureaus can take hours, and filling out lengthy forms while answering complex financial questions about your loans can be a real hassle. That's why hiring a qualified credit repair specialist at The Phenix Group can take this load off your shoulders so that you can focus on your life while your credit gets back on track.

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