How to Clean up a Credit Report

Get a Better Credit Rating With a Free Credit Check & a Bit of Work

Sep 28, 2009 Carol Finch

A consumer's ability to borrow/get credit agreements is tied into their credit report & score. What steps can be used to clean up a credit report and make things easier?

Any financial activity (such as borrowing and credit agreements) will be monitored on an individual's credit report. For some this means that past mistakes and mishaps give a negative impression to new lenders who may turn down their applications for credit. Taking some time to clean up a credit report can improve their situation and make it easier for them in the future.

Why Clean up a Credit Report?

Any consumer that has had financial problems in the past may well find that these end up being noted on their credit record. Missing payments on a credit card, for example, or making late payments on a mortgage will be listed here. This may not be a burning issue most of the time but, if the consumer then wants to apply for a new credit product or account, they may well find that their application is turned down or that they are charged higher costs.

Lenders need to be careful who they lend money to. A consumer with negative entries on their credit report may not score highly enough when the lender rates them to get the products that they need. There are, however, things that can be done to clean up a record. Some choose to do this before they apply for a product. Others will do it after a rejected application.

How to Access a Credit Report

The first step to take is to arrange to look at the credit report to see if there are any issues. The three main UK credit reference agencies (Experian, Equifax and Callcredit) all allow free online trials to do this. Or, consumers can pay a small fee to have a copy of their report sent to them.

How to Improve a Current Credit Report

At this stage, consumers should be looking for:

Anything that is missing and that can be added to improve a rating. For example, they should make sure that their report has up to date contact details and that they are listed on the electoral register at their home address.
Data that is incorrect that can be deleted/changed. Sometimes, negatives get on to a credit report by mistake or companies don't keep their data current. So, for example, if there is a missed payment listed on a credit card account that is incorrect or an account that has been closed that is still marked as current then the consumer can talk to the credit referencing company and find out what they need to do to have the details changed.
Anything that shows signs of fraud. Sometimes ID fraud can catch people unawares and the only time that they realise the problem is when they check their credit report. Look for evidence of applications or accounts that are not connected with the individual. Those worried about ID fraud can get help from the referencing agency to start sorting it out.
Historical financial connections that can be changed. People who may have applied for joint finance in the past with a spouse or partner and who are now separated/divorced may still have these connections listed on their report. It may be wise to ask the agency to remove them.

These steps can help clean up some issues. There are also some other steps that can be taken to improve a credit report in the future.

How to Clean up a Credit Report for the Future

Once a consumer has taken steps to make sure that their current credit report is up to date and accurate, they may want to think about how to keep it clean or improve it in the future. Useful steps here include:

Keep financial accounts to a minimum. Those with a lot of accounts often scare off lenders. Consumers could pay off and close down accounts that they don't use all that often or don't really need if they have the spare cash.
Keep application "footprints" out of a report. If a consumer applies for a new credit product, then their application will turn up on their report whether they take it out or not. Lenders don't like to see too many applications as it makes them worry about the consumer's financial status. Ask for quotes rather than making applications. If a lender states that they can't give a quote without a credit check, ask them to do a quotation search as this should not be publicly visible on the record.
Keep building credit. Those who have bad or no credit issues may need to actively build up their credit to improve their outlook. Look for credit building solutions that may be useful here.

It can be relatively easy to clean up and improve a credit report. In some cases the consumer may be able to do this themselves. In others they may need the help of the credit referencing agency. Bear in mind that using other companies to help improve credit may be a waste of time and money. Many companies that promise to do this will charge to do something that the consumer could do themselves or will promise solutions that they cannot deliver.

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