Credit Repair – How to remove black marks from your credit report
Find out how credit repair works and whether enlisting a credit repair company will work for you.
Lenders look at your credit report to assess your ability to repay a new loan, so any black marks on it could reduce your chances of getting approved.
If you have incorrect listings on your report and a bad credit score, there are steps you can take to improve your report. You can do this yourself or through a credit repair agency. To decide which option is right for you, use this guide to learn how credit repair works.
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How to repair your credit report in 3 steps
Step 1. Order a copy of your credit report
The first step is to review your credit report. You can check your credit report and credit score (provided by Experian) for free with finder and revisit it at any time in your Finder account. We'll also send you updates if anything on your credit report changes.
If you prefer to order your credit report directly from the credit bureau, you also have that option. You are entitled to one free credit report per year and it takes around 10 working days to receive. You can order it from Experian, Equifax or Illion (formerly Dun & Bradstreet).
Step 2. Identify the black marks and defaults
Once you’ve received a copy of your credit report, look for any incorrect black marks or defaults. This refers to information on your credit report that may indicate that you've had issues repaying your credit including:
- Missed payments. Your credit report retains repayment history information from the past two years. This means that any missed payments on your mortgage, personal loans, or credit card accounts during the last two years will show up your credit report.
- Overdue accounts or payment defaults. Overdue amounts of $150 and above are recorded once they are 60 days overdue. Defaults can damage your credit report as they indicate your inability to make timely repayments. These listings remain on file for five years.
- Clearouts or serious credit infringements. These are overdue accounts or payment defaults where the credit provider has not been able to contact you. Clearouts and serious credit infringements stay on your report for seven years if they remain unpaid. If paid, these listings only remain on your report for five years and are defined as “payment defaults”.
- Writs and summons. This refers to if you've been summoned to court to settle a debt. They stay on record for five years.
- Court judgments. Court judgements including bankruptcies, personal insolvencies or debt agreements can stay on file for five years or longer. This depends on when the case is officially resolved. For instance, bankruptcy goes off record two years from your date of discharge or five years from your date of bankruptcy, whichever is later.
- Credit enquiries. Applications for any form of credit (including personal loans, mortgages and even utilities) can remain on your credit report for up to five years, regardless of whether they are approved. That’s why it’s important to check if you're eligible before you apply for a line of credit. If your application is rejected, wait a few months before applying again.
Step 3. Remove the black marks and defaults
Listings can only be removed from your report if they're incorrect or after the rightful duration. If you identify an incorrect mark on your credit report, you can contact the credit reporting agency to have it removed. If you're not comfortable doing this yourself, you can enlist the help of a credit repair agency.
Credit repair companies are experts at spotting these errors and may have a better chance of removing false listings. These companies charge fees and there are no guarantees they can remove the listing. Before you get help from a credit repair agency, compare your options and confirm whether or not benefits outweigh the costs.
If the black mark is legitimate, confirm when it was listed on your report and how long it will be until it's removed from your account. In the time being, you may want to hold off from applying for any other credit products and concentrate on repaying any existing debts. This will help improve your credit score until the defaults or black marks are removed from your report.
You can call a credit repair company for a consultation at any time, but remember that credit repair can only remove incorrect or illegitimate listings. There’s no guarantee that credit repair will work for you and it's important to compare your options.
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