Removing derogatory marks from your credit report is important as it will improve your credit score and overall financial health. The derogatory marks, which usually reflect late payments, collections, charge-offs, bankruptcies, and foreclosures, can stay on your report for up to seven years, or even ten years for certain types of bankruptcies. However, there are several strategies you can implement to remove these negative entries. Check some of the important factors based on which you can get the derogatory marks removed from your credit report.
Table of contents
Download Credit Reports
Downloading your credit report for free is very easy these days due to the availability of multiple financial apps like ET Money, Paytm, PhonePe, Cred App etc. All these apps provide the option to download the credit report for free from major credit information companies like Experian, TransUnion, Equifax etc. Get a copy of your credit report from each of the three major credit bureaus. Review each thoroughly to identify any derogatory marks in credit report. Also, make sure that all the entries marked in the credit report are accurate and that there are no incorrect entries.
Also Read: Check here all the major information on SBI Education Loan Schemes to study abroad
Dispute Inaccurate Information
If you find any inaccuracies, you can dispute them with the credit bureau. Identify errors like incorrect late payments, accounts that don’t belong to you, duplicated accounts, dues paid but still showing pending etc. Collect documents supporting your dispute, such as bank statements or correspondence with creditors. You can file disputes online, by mail, or by phone. Provide a clear explanation of the error and attach your supporting documents. The credit bureaus are required to investigate disputes within 30 days. The derogatory mark will be corrected or removed if they find your dispute valid.
Request Goodwill Adjustments
You can request a goodwill adjustment if you have derogatory marks due to genuine mistakes and have a history of timely payments. Write a letter to your creditor explaining your situation, and the steps you’ve taken to avoid future mistakes, and ask them to remove the negative mark as a gesture of goodwill. Sometimes it happens that due to technical issues, the payments are deducted after the due date and late payments are reflected in the report. All such cases shall be brought to the attention of the lender so that it can be corrected.
Also Read: Going through your credit report? Check here what is Days Past Due in CIBIL
Negotiate with Creditors
For outstanding debts, negotiating a settlement can sometimes result in the removal of derogatory marks. You can offer your lender pay for deletion. In this arrangement, you negotiate with the creditor or collection agency to pay off the debt in exchange for them removing the negative mark from your credit report. Get this agreement in writing before making any payments. Even if a “pay for delete” isn’t possible, settling the debt can stop additional negative marks from appearing. Ensure the account is reported as “paid” or “settled” rather than unpaid.
Wait for Natural Removal
Some derogatory marks will naturally fall off your credit report over time. For example, late payments usually remain for seven years. In case of bankruptcies, seven years for Chapter 13, and ten years for Chapter 7 type of bankruptcies. While waiting for these marks to disappear, focus on building positive credit by making timely payments, keeping credit card balances low, and avoiding new derogatory entries.
Also Read: Check here all about Having and Maintaining a Good Credit Score
Consider Professional Help
If the process seems difficult, you can consider seeking help from a credit repair company. These companies specialise in disputing errors and negotiating with creditors. However, beware of scams and choose a reputable company. Companies like Credit Help India Services Pvt Ltd, First Credit Services, Trinity Credit Solutions etc help repair your credit score through different mechanisms.
Tips for Maintaining a Clean Credit Report
Maintaining a good credit report is very important for financial health. In order to do this, you need to consistently monitor the credit report so that there shall not be any error or suspicious activity. You can do this by simply downloading your credit report every month for free without any negative impact on your credit score. Check some important tips for maintaining a good credit score below:
- Pay bills on time to avoid late payments as it will negatively impact your score.
- Monitor Your Credit Regularly. You can use credit monitoring services to keep an eye on your credit report and catch any issues early.
- Always try to keep your credit utilisation low as high credit utilization can negatively impact your score.
Improving your credit takes time and persistence, but by following these steps, you can work towards removing derogatory marks and enhancing your financial future. Check some common FAQs on derogatory marks on credit reports below.
FAQs
You can download your credit report for free through various financial apps like ET Money, Paytm, PhonePe, and Cred App. These apps provide access to your credit reports from major credit bureaus like Experian, TransUnion, and Equifax.
If you find inaccuracies such as incorrect late payments, accounts that don’t belong to you, or duplicated accounts, you should dispute them with the credit bureau. Gather any supporting documents, such as bank statements or correspondence with creditors, and file your dispute online, by mail, or by phone.
Yes, you can request a goodwill adjustment by writing a letter to your creditor explaining your situation, highlighting your history of timely payments, and asking them to remove the negative mark as a gesture of goodwill.
Yes, you can negotiate with creditors or collection agencies to remove derogatory marks by offering a “pay for delete” arrangement. This involves agreeing to pay off the debt in exchange for the creditor removing the negative mark from your credit report.
If you can’t remove derogatory marks immediately, focus on building positive credit habits while waiting for them to naturally fall off your report. Most derogatory marks, like late payments, remain for seven years, while bankruptcies can last for seven to ten years depending on the type.
To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
