When you suffer from the chronic condition called imperfect credit, it doesn’t seem to matter how you got there; only that you are there. Enter the debt relief, consolidation and credit repair companies claiming to have the solution to “save the day”. These companies make grandiose bucks, and lofty promises, saying they have the magic medicine to remove your extraneous and less than stellar debt history. The grim news is that you can’t legally erase adverse credit that belongs to you, and neither can these hefty promises makers stand the test of time to rid you of your malady. The good news is that there are some things you can do to improve your credit, and make lousy debt disappear when the conditions are right.
The first thing you need to do is order your free annual credit report and evaluate the listed accounts. Like credit repair and consolidation companies, there exists a myriad of firms out there promising a “free” credit report that isn’t entirely free. The only totally free way to get a copy of your credit report without further obligation or subscription requirements is to visit www.annualcreditreport.com. The reports from each credit bureau (Transunion, Experian, and Equifax) are written in everyday English and simple to understand.
Next, it’s time to evaluate your report. Look for debts that are in collection, charged off, or reflect late payments. Since many credit reports contain errors, not all of that “bad debt” being reported may belong to you. Check the report for discrepancies, and then file a dispute with the credit reporting agency online. After they review the information, they will send you an updated report showing the details removed, or an explanation of why the information remains. You will probably have to repeat this process several times in order to achieve the desired result, erasing negative entries.
For accounts that do belong to you, currently in charged off or collection status, it’s possible to negotiate with the creditor to recognize the account as “paid” with a settlement offer. These creditors and collection agencies have gone so long without payment, the hope of recovering the full amount of the debt is a distant memory. In these cases, the creditor or collection agency will accept a settlement, typically for pennies on the dollar. Once the debt is marked as paid or settled, it will drastically improve your credit circumstances.
Since poor credit accounts can only survive on your report for seven years before deletion, time is your best friend when it comes to erasing bad debt for good, but being proactive with bad debt to begin with is the best way to get the most effective results.