How to Clean Up Your Credit Report: A DIY Guide

There’s never a bad time to clean up your credit report. In fact, one in five people have a ‘material’ mistake on their report, making it crucial to keep a close eye on what your credit report contains. Our DIY credit cleanup guide will help you understand what types of mistakes to look for, how they happen, why you should care, and what you can do about it.

Getting a copy of your credit report

Before you can clean up your credit history, you have to become acquainted with what your report contains. 

Fortunately, you can view your credit report for free once a year from all three major credit bureaus, making that the perfect cadence to stay on top of any potential mistakes. Since reviewing your own report is not considered a hard inquiry for new credit, checking your report will not impact your credit score.

Once you've got the report, read it carefully. Financial experts recommend reading reports from all three major credit agencies closely to check for errors in your credit history. The Information may vary between the agencies.

Common mistakes on credit reports

Credit reports can have mistakes that range from mislabeling on-time payments as late to including accounts that aren’t really yours. Here are a few common errors to look for, plus how to clean up each mistake:

• If you’re seeing accounts you don’t recognize, make sure each one has the correct account information, up to and including each letter of your name. A missing or incorrect middle initial could mean someone else’s new credit card is showing up on your report by mistake.

• If you’re seeing more debt than you actually have, check to see if a particular account got listed twice. Often, this is a clerical error where one debt account is counted twice—which can pull down your score.

• If you’re seeing bad accounts that were closed over seven years ago, do a little research to find out why it’s still showing up on your report. You may need to contact the lender to ensure they’ve reported the payoff date correctly.

Removing bad credit from your record

If you find something amiss, don’t despair. Each credit agency is required to address any dispute claims within 30 days. Write a letter—with the help of the Federal Trade Commission—and send it to each agency that needs to take action.

Cleaning up credit mistakes can be a big pain, so is it worth the time and effort?  The answer is yes, especially if you care about your credit score.

Raising your credit score in 30 days

After you’ve viewed your report, noted the errors, and resolved any disputes, you may be wondering what else you can do to raise your score.

We have compared credit scores to weight loss; crash diets and quick financial fixes usually aren’t the answer. However, there is one specific part of your credit usage that can impact your score in a short period of time: debt utilization.

Debt utilization is simply the amount of debt you’ve used versus the amount you could use. For example, if all of your credit cards combined allow you a $10,000 limit, but you’ve only used $3,000, your utilization ratio is 30%. Experts recommend staying below a 30% utilization to keep your credit in tip-top shape.

If you have low credit limits, this can be hard to do. The good news is that, unlike many parts of your credit score that are based on past behavior, most models only factor current debt utilization into your score. Therefore, your strategy should be two-fold: pay down debt while also increasing your credit limits - which creditors are happier to do when you’ve been consistently paying bills on time. 

DIY is Good

While it might seem difficult to find and remove errors on your credit report, it’s well within your grasp to do it yourself.  After all, no one knows your real credit history better than you do.  Stay vigilant about mistakes and work to get them resolved quickly.

For more about fixing your credit, visit the FTC Consumer Information page.