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The Fastest Way to Fix Bad Credit

By Eva Norlyk Smith, Ph.D.
August 10, 2009
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If you have bad credit, one of the fastest ways to improve your credit score is to check your credit report for errors. Statistically speaking, 75% of credit reports contain errors, and some of these can easily pull down your credit score. Even people who don’t have bad credit are advised to check their credit report at least once a year and correct any errors they find.

Here are five steps to finding and disputing errors on your credit report.

Step 1. Get a copy of your credit reports.

There are three credit reporting agencies—TransUnion, Experian, and Equifax. While it might seem that getting a credit report from just one of the credit bureaus would be enough, financial advisers recommend checking out all three, because they often differ. By law, the credit reporting agencies are required to let consumers see their report for free once a year. To download a copy for free, go to or call 877-322-8228.

Step 2. Review your credit reports line by line.

When you receive the credit reports, go through each report line by line to look for inaccuracies. Here are some of the things to look for:

  • Is the credit limit on all credit card accounts correct? In some cases, credit card companies won’t keep the credit limit on a card updated. This can affect your credit score by making it look like you use more of your total available credit than is really the case.
  • Are there any accounts or items that you don’t recognize? Accounts or other financial activity you don’t recognize could be a sign of identity theft.

Step 3. Highlight the negatives

Look for negative credit items that pull down credit scores. These include late payments, missed payments, collections, public record items, foreclosure proceedings, and charge-offs. For each item that needs attention, highlight it on each credit report and return to it later.

Negative marks stay on the credit report for many years after they get resolved. Unpaid collections will be marked on the credit report as “collection,” and if it’s paid, it will be listed as “paid collection.” Missed payments, paid tax liens, and public record items stay on the credit report for seven years. Bankruptcies remain on the account for 10 years, and unpaid tax liens for 15 years.

Step 4. Dispute inaccurate information.

In the past, inaccuracies could only be disputed by mail. Nowadays, each of the three credit bureaus,,, and, allow consumers to submit disputes directly at their website.

When submitting the dispute, state why the information is incorrect and enter any supporting facts. If you submit the dispute online, once you click the Submit button, a notice is automatically sent to the source of the negative item.

When you file a dispute, the party that submitted the negative item must verify the account data and respond within 30 days. If the party is unable to verify the information or doesn’t respond within the required 30 days, the negative item will be removed from the credit report. You will receive a credit report reflecting the results of the dispute by email for online dispute and by mail for disputes that were mailed in.

5. Review the results of the dispute.

If the source of the negative item verifies the information, the negative mark will remain on the credit report. But even if the item stays on the report, you still have options. If there are unique circumstances involved, add a 100-word personal statement to the report, explaining your side of what happened. While the statement won’t affect the credit score, potential lenders, employers, or landlords may take it into account when looking over your credit report in the future.

As negative items disappear from your credit report, your score will improve, steadily and surely, as along as you abide by the basic rules for keeping a good credit score. It will take months to see results, but for the little time invested, the effort is well worth it.




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