If you haven’t taken a look at your credit report in a while, it might prove worthwhile to do so. Keeping track of your credit history by reviewing your credit reports can help eliminate current and future financial problems. Unbeknownst to you, there may be some past debt that makes its way onto your credit reports, identity fraud, or a line of credit you’re not responsible for. Addressing these credit issues can lead to a myriad of positive consequences, but you needn’t be intimidated by the process. Often, you can contest certain debts on your credit reports, but it’s necessary to be aware of all of your debts, your rights, and the different policies of credit bureaus.
The first step in removing bad or harmful debt from your credit report is determining what can actually be removed. Below are four types of debt that you can get removed from your credit reports.
Typically, errors on your credit report show up in the form of debt that cannot be verified. Unverifiable debt includes any item that cannot be verified by the original source. It is largely the responsibility of credit bureaus to complete the verification process of items on your credit reports. Such process involves bureaus contacting the institution reporting the debt to ensure the amount owed is correct.
Judgments, as they pertain to your credit reports, include government decisions involving your individual finances. Judgments are typically determined through a court of law. Common examples include tax liens reported by the IRS and debt reported by a collection agency. You will undoubtedly know if this type of report is something you can remove from your credit reports. Judgments are issued after official court hearings. Below are two types of judgments that can be removed from your credit reports:
- Tax Lien
Federal tax liens are commonly removed from credit reports if the debt in question is withdrawn. A federal tax lien which has been withdrawn means you have come to an agreement with the IRS to either pay off the debt in full or enter a repayment plan in order to pay off the debt in full over a specified period of time. If you have a withdrawn federal tax lien that still appears on your credit reports, you should file a report with the credit bureaus in order to get them removed.
- Vacated Judgment
Essentially, a vacated judgment is a ruling made by a court of law that is no longer valid – vacated judgments basically no longer exist. This can occur if you have been sued and lost the case to a financial institution (e.g. collection agency or creditor). Credit reporting agencies often report the rulings on consumer credit reports, and will remain on your credit reports for seven years, regardless of whether or not they are paid.
YES: Identity Theft/Fraud
Identity theft is unfortunately becoming increasingly more common as it becomes easier for criminals to collect your information online and in store. Because identity theft is a common complaint, the Fair Credit Reporting Act (FCRA) requires that any report of identity theft must be temporarily removed an individual’s credit report by credit bureaus.
If you find that you have been a victim of fraud and it is negatively impacting your credit, you should immediately contact credit bureaus (and local authorities) to address the issue(s). First, you should file a police report at your local police department. When you file a report, you will be filing an identity theft report, which includes an identity theft affidavit. Once the report is made, you should provide a copy of the report to the Federal Trade Commission so that your credit reports can be adjusted.
Remember: Identity theft is a serious crime. For a complete list of your rights as a victim of identity theft, review the Federal Trade Commission’s “Statement of Rights for Identity Theft Victims.”
YES: Credit Cards
Okay, there are some exceptions to the types of credit cards that can be removed from your credit reports. If your report is showing debt from a card that you are simply an authorized user on, you can usually get the debt removed from your credit report. This is because authorized users are not held financially responsible for the debt. In other words, authorized users are able to make purchases with the card, but the lending company does not hold the authorized user liable for the debt incurred from those purchases.
Removing authorized credit card debt from your credit reports is relatively simple. First, you need to remove yourself from the card. Contact the credit card company to have them remove you as an authorized user. Doing so will ensure you are no longer associated with the card and the account’s debt. Once you have done this, you can follow up with credit bureaus to ensure the debt is released from your credit reports.