How to Repair Your Credit: FAQs on Disputes and Collections

A low credit score has a way of showing up at the worst moments, like when you're applying for an apartment or financing a car. Addressing credit challenges often involves understanding your rights as a consumer, especially if you are facing pushback from lenders or navigating accounts in collections.

With a LegalShield® Personal Plan, you can connect with a provider law firm for advice on your rights as a consumer, whether you're dealing with credit card debt or medical bills. Having someone to call can make a stressful situation feel a lot more manageable.

This article gives you a few ways others have repaired their credit, including a few tips on your legal rights as a consumer.

Where to get a free copy of your credit report?

Before you can fix anything, it helps to know where you stand. You can order a free copy of your credit report from AnnualCreditReport.com, the federally authorized source for free reports.

Through the website, you can pull your report from all three credit bureaus (Equifax, Experian, and TransUnion). It helps to have all three since they all carry different information and can give you a full picture of which accounts are hurting your score and where to start.

For many, that means dealing with errors on the reports themselves.

You can also obtain a free credit report if an agency uses your credit to make decisions about its services to you, such as your home or car insurance, or if you applied for a credit card.

How to file disputes on erroneous accounts

You can use your credit reports to dig through your account details and mark anything that looks off. These could include an account that isn’t yours, a balance that isn’t right, or a late payment you’re sure you made on time.

Under the Fair Credit Reporting Act, the credit bureaus generally have to investigate a dispute once you raise it. However, it helps to make your case clear from the start because they could turn down disputes they consider frivolous or irrelevant. An investigation doesn’t always result in removal if the creditor verifies the information.

Evidence will help your case if you’re claiming that information is incorrect on your credit report. This evidence could come in the form of settlement agreements or police reports, depending on the circumstances. Try to make it easy for others who are not involved to see the same error you do.

For your convenience, we’ve provided links to the online dispute forms with the three major credit bureaus:

• Equifax Disputes
• Experian Disputes
• TransUnion Disputes

If you prefer a written record, you can also submit your dispute by certified mail. Consider using letters from the Consumer Financial Protection Bureau.

A second opinion could help here by keeping you informed of your rights. With a LegalShield Personal Plan, you can connect with a provider law firm to help understand your rights as a consumer. Some legal guidance in your corner can help debt feel a lot less overwhelming.

Handling your past due accounts (including collections)

Past due accounts can have a significant impact on your credit score. Lenders and other account holders report data to the credit bureaus once every 30 days, including information about your past-due accounts.

If remembering due dates is part of the problem, setting up autopay can take that off your plate. Even automating the minimum payment helps you avoid new late marks while you work on the rest.

Some companies offer hardship programs to help you navigate through difficult financial times. These programs may include deferred payments or temporary relief from late fees, but vary from one company to the next and can also depend on the type of debt.  

The Consumer Financial Protection Bureau (CFPB) notes that the statute of limitations may vary by state. In some states, the statute of limitations for all debts can begin either when a payment is missed or when the most recent payment was made. Keep in mind that the statute of limitations is governed by the FCRA, so contact a lawyer if you have questions about the statute of limitations for collections in your state.

Understanding how credit utilization impacts your report

High credit card balances affect your credit utilization, the amount of available credit, which affects your credit score. When balances are high relative to your limits, utilization goes up. Bringing those balances down can help raise your credit score.

Some consumers choose to lower their utilization by negotiating debt settlements to reduce the amount they owe. But some of these companies are scammers, as fraudulent credit repair companies often show these signs:

• Demand upfront payment
• Assurances that the debt will be settled or reduced
• Charge a fee before they settle or reduce a debt
• Instruct you to provide inaccurate information to credit reporting agencies and lenders
• Claims that they will remove negative information from a credit report, even if that information is accurate
• Tell you not to contact or respond to credit reporting agencies yourself

Under the Credit Repair Organizations Act, these companies can't ask for payment before the work is done or promise results they can't deliver, so be cautious with any parties that guarantee a specific score jump or want money up front.

The role of hard inquiries on your credit profile

Opening a new credit card can increase your available credit, which can help reduce utilization, but it also adds another balance to track and puts a new hard inquiry, which has a slight negative impact on your credit report. Some people find it simpler to work with the accounts they already have rather than risk a slight drop in their credit score with a new application.

You can also have more control over when you apply for new credit with a security freeze. The FCRA requires that these freezes be made available to consumers thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act. A freeze can also help protect you from identity theft if someone uses your personal information to apply for credit.

How does the age of credit factor into your score?

Part of your score comes from how long you’ve had credit, which is why some people keep their oldest accounts open as long as possible. Closing your older accounts can shorten your average credit age. Closing older cards can reduce your available credit as well, so some people keep them open longer, even when they aren’t using them as much.

In some cases, a card issuer will close an account on its own if it sits unused for a long stretch. To keep these cards active, some people add a small recurring charge, such as a streaming subscription, and set it to auto-rebill to keep the account in good standing.

Credit age is one of the slower parts of credit repair, building with time, not effort. The main goal of people prioritizing it is to avoid undoing progress you’ve already made.

What makes up a credit mix, and how does it affect your credit?

Your credit mix is the range of credit types you use and plays a smaller role (and has a smaller impact) on your credit score than payment history and utilization. Most credit in your mix falls into one of two broad categories:

• Revolving credit: A balance that changes month to month as you borrow and pay it back, like a credit card or line of credit.
• Installment credit: A fixed loan you pay down over time in set payments, like a car loan or student loan.

Someone with only credit cards or only loans has a thinner mix than someone with a bit of both. There’s no target number of accounts to hit. For some people, it matters far less than paying on time and keeping balances low.

How to ask for a negative history to be removed

Goodwill letters ask creditors to remove negative marks, such as late payments, as a courtesy. It might work better if you have a creditor with whom you have a long, positive relationship, like a bank or card issuer you’ve paid on time for years.

There's no set format, but a goodwill letter often includes these details:

• Your information: Name, address, and account number, so the creditor can find the account.
• The mark in question: Which entry you're asking about, along with the date it happened.
• What led to it: A brief, honest explanation of the circumstances, especially if it was a one-time slip.
• Your track record: A reminder of your history of on-time payments and any steps you've taken since to keep it from recurring.

Like pay-for-delete arrangements, goodwill letters come with no guarantees. Creditors don’t have to remove accurate information, and it is not required by law, so it’s best thought of as a low-effort request that sometimes works rather than a reliable fix.

Get legal consultations throughout the dispute process with a LegalShield Membership

Knowing your rights and where to start can help make credit repair easier. But when an account is in collections or a creditor pushes back on a dispute, knowing your rights matters more.

With a LegalShield Personal Plan, you can get advice from a provider law firm to better understand your rights as a consumer. Whether you have bad debt or false negative marks, a provider lawyer can help you understand your options. Sign up for a plan today to ensure you’ve picked the right route for your needs without paying the expensive hourly fee that some lawyers can charge.