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Disputing negative credit information usually cannot be done all at once. It is better to challenge the most severe items immediately and then move onto less severe items.

If your credit is a mess, chances are you have a variety of bad credit listings such as charge offs and collections. Some items are more damaging than others.

Below I listed the full gamut of negative items in order of severity:

A judgment or public record (including tax liens) are the worst item. This is because they can stay on your file for ten years.

Included in Bankruptcy also falls into the most severe category. If you filed bankruptcy these items are referred to as those discharged in the case. They are just as severe as the bankruptcy listing itself.

Collection Accounts are considered very severe. Collection agencies often place negative marks on your credit as motivation to get you to pay. Sometimes you can negotiate a payment in exchange for removal of the listing. Never negotiate for a “paid” or “paid for less” listing. A paid collection is almost as bad as an unpaid collection listing.

A foreclosure and a repossession can prevent you from getting credit for a home and/or car in the future. These are looked as very severe.

A charge off is very severe. You may even have multiple listings on your report for a single charge off since it is bought and reported by third-party collection agencies.

A recent late payment surprisingly is equally bad as a charge off. The more recent a black mark is on your credit report, the more it lowers your credit score. Multiple late payments only make matters worse. The credit bureaus interpret multiple late payments as signs that you are having a financial meltdown.

A 30, 60, 90, or 120 late payment is considered moderately severe. The later the payment, the tougher it is to remove from your report. However, one or two late payments can often be negotiated away with the creditor.

The credit scoring formula is biased more towards recent late payments. Older late payments should be given a low priority in your dispute process.

Incorrect Personal Information such as a wrong address or employer is not important. The credit scoring formula does not use this information to generate your score so it is less important compared to the items above.

With all that being said, I suggest that you review your credit reports and begin dispute the inaccuracies that are considered very severe. As you receive your results, focus on the less damaging items such as old late payments. This method will assist in quickly improving your credit score.

Tags: Money

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