Cleaning Up Your Credit Report

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cleaning up your credit report
There are two phases to regaining control of your credit. The first phase is to review your credit reports and make sure they don’t contain incorrect or inaccurate information about you or your credit history. This is the area that we will focus on in this section of the mini-course.

White Wealth Belt (WWB)
Jumpstart Training Mini-Course

  1. White Wealth Belt: Introduction
  2. Cleaning Up Your Credit Report
  3. 3 Debt Relief Options If You Can No Longer Make Minimum Payments
  4. Creating a Household Budget
  5. Strategy for Paying Off Debts Faster
  6. Saving and Investing Strategy & Conclusion


The second phase is to raise your FICO credit score by understanding what’s hurting it, and then taking corrective action to reverse the downward spiral. We won’t delve deeply into this area here because you’ll have to make some big decisions about your finances first. But if after reading through this course you decide to make a concerted effort to further raise your credit score, feel free to review our tips in the Yellow Wealth Belt mini-course.

Your credit report contains information about your credit history, how well you pay your bills, how much debt you’ve taken on, who you’re doing business with, financial problems, criminal convictions, etc. It is used by current and future creditors, and even some employers to make decisions about you.

For a credit report to be clean, it should not contain inaccurate data or items that would give the impression that you are untrustworthy or are a poor credit risk.

There are three national credit reporting agencies or bureaus that collect credit information about you from merchants, creditors, regional credit bureaus, and public sources. The agencies you need to become most familiar with are:

– Experian
– TransUnion
– Equifax

As your credit information is collected each month, it gets fed into a giant computer (just imagining) by each agency. The machine uses mathematical formulas to crank out your FICO credit scores. The scores can vary across credit bureaus because the agencies operate independently and don’t receive every bit of information about you at the same time.

Now, you might be wondering why credit bureaus go through all this trouble. Well, as you can probably guess, there’s lots of money involved. They profit by selling this information to potential and current creditors, and employers who’d like to know more about you before getting in bed with you.

Since your financial reputation is defined by your credit reports, and the information they contain can impact your life in many ways, it’s imperative that you monitor them, even after you’ve cleaned them up. Here’s why:

In a 2009 study performed by the National Association of State Public Interest Research Groups, a staggering number of credit report inaccuracies were discovered. Nearly 80 percent of the credit reports contained irregularities. And for approximately 25 percent of the reports, the errors were significant enough to trigger a denial of credit. Ouch! So cleaning up your credit report should be at the very top of your list for regaining control of your finances.


Here are some of the other significant findings:
  1. 54 percent contained inaccurate personal information such as misspelled names, wrong Social Security numbers, inaccurate birth dates, inaccurate information about a spouse and out of date address. For example, one credit report listed a man’s business partner as his spouse.
  2. 30 percent listed “closed” accounts as “open.” For example, listing a student loan that was paid off years ago as still outstanding. Another report listed several credit cards, a mortgage and an auto loan all as open.
  3. 22 percent of reports had the same mortgage or loan listed twice. This mistake often occurs when loans are serviced or sold.
  4. 8 percent of reports simply didn’t list major credit, loan, mortgage or other accounts that could be used to demonstrate the creditworthiness of a consumer.

These errors can create the appearance of a consumer having “too much” credit available, being over-extended, or not having been a responsible payer of his or her obligations.

Free Credit Reports vs. Paid Credit Reports

Getting your credit reports means retrieving them from Equifax, TransUnion, and Experian. You can get your reports in a couple of ways. One way is for FREE and the other is to pay for them.

According to the Fair and Accurate Credit Transactions (FACT) Act of 2003, each of the 3 major credit bureaus is legally required to provide you with a FREE copy of your credit report annually upon request.

This means you can check your credit history once every 12 months. While you could contact each agency individually, they made it super easy for you by setting up a website called

Since this is the official web site, you won’t have to worry about the information you enter being stolen. The other good thing is that requesting your free credit reports will have no negative impact on your credit scores.

Note: Beware of fake web sites. Everything you need to request your 3 free credit reports from Annual Credit Report is shown below, even if you prefer to use standard mail.

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Filling out the online form is pretty straightforward. You’ll have to answer some basic questions to verify your identity. For example, you may be asked to confirm the amount of your current monthly mortgage payment. But once you do, you’ll get your credit reports immediately online after you submit the form.

The only downside to the FREE annual credit reports is that you won’t get your FICO credit scores. The law doesn’t require the bureaus to provide that bit of information. So, you’ll have to pay for them.

To get your FICO scores, I suggest that you get them them here Do it today if you don’t know your score. Then, only obtain them in future years when you want to confirm that your score is rising or has reached the desired level you want.

Your FICO score is an indicator of your credit worthiness. It’s not the only credit score being advertised in the marketplace, but it is the most widely used by creditors. FICO credit scores range from 300 (really bad) to 850 (awesome). There are no official in-between scoring ranges that might better define someone’s credit as not so good, good, and very good. According to the FICO people, about half of the U.S. population has credit scores above 723 and the other half are below that number.

If you want to put yourself in a position to always get the lowest rates on mortgages, car loans, etc., then shoot for a credit score above 740.

Now, if you didn’t know it, back in 2009 Experian ended its partnership with the Fair Isaac Corporation to generate FICO scores for consumers. But that changed in May 2013 and the love affair is back on again.

How to Dispute Credit Report Errors

Once you obtain your credit reports, you may find problems or errors. In this case, you’ll need to contact the bureaus directly and separately. Your dispute should be sent as a letter that you mail to them. In it, you’ll need to provide them with:

– Your name
– Your Address
– Your credit report
– Reason for the dispute

You’ll also have to include proof that the error is incorrect. For example, if the name or address on your credit report is wrong, you can send a copy of your driver’s license or utility bill. If it has something to do with a late payment issue, you can provide the canceled check or statement.

Be sure to highlight the error in both the credit report and proof document(s). And never send original documents, copies only. I also recommend that you send all letters as certified mail with return receipt confirmation. This way, you’ll have proof of delivery and a paper trail in case you have to sue the agency. Here’s a dispute letter template, if you need one.

credit dispute letter template

Finally, if you have multiple disputes, don’t lump them all into one letter. Submit each dispute separately to the credit bureau. By law they are required to respond to you within 30 days. If they don’t, they must remove the item being disputed from your file. Here are their mailing addresses:

Equifax Inc.
P. O. Box 740241
Atlanta, GA 30374-0241

TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000

Experian – NCAC
P.O. Box 9701
Allen, TX 75013

Action Steps:

  • Get your Experian, TransUnion, and Equifax credit reports. Obtain them from if you don’t know your FICO credit score. Otherwise, order the free versions from
  • Review all three credit reports for errors and discrepancies, and highlight these problems.
  • Mail dispute letters to the applicable credit bureaus and ask them to remove/correct the problem items.

>>>3 Debt Relief Options If You Can No Longer Make Minimum Payments>>>

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