How To Repair Your Credit Report History

When it comes to repairing your credit history it may seem that simply getting your payments back on track or paying off some of your debts altogether might be answer but, unfortunately, life is not quite as simple as that as even when you do clear a debt the creditor will still annotate your credit report to show this clearance and the wording which he uses to do so can in itself effect your credit score.

Just before we look at this however there is one other point we should make about your credit history. Items which appear on your credit report are time limited and will be removed from your report 7 years after the last entry is made for a particular item. If you have an outstanding debt which has been on your record for 5 years therefore since it was last amended it will disappear in 2 years time. However, if you pay off this debt then you will start the clock running again and the entry will remain for a further 7 years. This needs to be taken into account when you are considering whether or not to clear a particular debt.

One other thing which you need to know about your credit report is that any creditor who is permitted to add information to your report is also permitted to change that information and indeed to delete it.

Against this background let us look at a very important but much overlooked aspect of repairing your credit score - the matter of repairing your credit report history.

Let us assume that you have a debt which has been passed to a debt collection agency for recovery and you are in the process of negotiation clearance of this debt with the debt collector. We cover exactly how to go about this in our article entitled "How To Deal With Debt Collection Letters" so we will not cover that again here but will consider one aspect of the settlement of this debt which many people should, but do not, negotiate.

The debt collector's principle aim is to recover your debt and he is not terribly interested in your credit record. He is however conscious of the negative effect that clearing your debt can have on your record and so will often to open to removing a negative entry from your record as part of the settlement.

If at all possible you should therefore include this requirement in your negotiation and get him to agree to removing the entire negative debt listing from your file before making any settlement payoff. Now there are both advantages and disadvantages to doing this of course. On the one hand it will certainly be in your interest to have the entry removed but the mere fact that you are asking for it to be removed, and thus indicating that your credit record is important to you, may also lead to the debt collector requiring a higher settlement figure.

One way around this is not to make this a condition until after a settlement figure has been agreed. At this point you can then make your payment to the debt collector but enclose what is known as a "conditional endorsement" statement with your settlement check. This statement should normally be drafted by an attorney and simply informs the debt collector that you require him to delete your negative entry as a condition of acceptance of your settlement check. This will often work because, having received your check, the debt collector is happy with the outcome of your case and so will remove the entry without a second thought. The danger however is that he could also simply reject your terms and return your check. He could also simply deposit your check and not alter your listing, leaving you to try and fight on to get him to remove the listing.

As a general rule most creditors can be persuaded to delete a negative entry but it can be a matter of finding the right person to speak to and this can take a very long time. Where you cannot get a creditor to delete an entry however all is not lost and there are still a number of alternatives.

While getting an entry deleted is your best option, the next best alternative is to have your entry simply marked as "Paid". Your account will often be marked to show not merely that an account has been paid but also to indicate the circumstances under which it was paid and this can add to the negativity of your record. It could for example be marked as "Paid charge-off" or as "Paid late negotiations". If the creditor will not agree to delete the entry entirely then try to get him to simply mark it as "Paid" and to remove any other negative notations.

If this does not work then the next line of attack is to have your account listed as "Settled". Although this is not the best listing in the world and is negative in nature, it is certainly better than something like "Paid charge-off".

If all else fails you may have to accept a listing of "Paid charge-off", "Paid collection" or "Paid late" which is not ideal but is still better than having your listing marked as "Unpaid".

One final note, if you do dispute the listing then you will often find that, once an account has been paid, the mere fact that you are disputing the listing will result in it being deleted since this is an easy way to resolve the matter and the creditor, having got his money, now has no real reason not to delete the listing.

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