Do you have bad debt listed on your credit report? Fret not! Here’s how you can remove negative stains off your credit report easily.
A bad debt entry on your credit report is one of the worst types of entries you can have as it can badly hurt your Credit Score. Negative remarks on your report can happen if you have unpaid debt or any overdue payments on your Credit Card or Loan EMIs for several months. In that case, creditors may put negative comments on your credit report which will stay for a long time and can make you look bad to future lenders.
Here’s how you can remove negative remarks from your credit report.
Additional Reading: Here’s Why You Should Check Your Credit Report Throughout Your Life
Negotiate With The Bank
There are times when due to unforeseen circumstances one is not able to make payments against an outstanding Loan or Credit Card amount for more than 180 days. In such cases, the lender reports this on your credit report as “Written off”. This status will not only hurt your Credit Score but can also adversely impact your Loan or Credit Card applications.
You can request the current creditor to remove the “Written off” status from your credit report in exchange for making a payment. Although it’s smart to make the full payment, in case you are short of funds, you can write to the creditor offering to pay a settlement amount. This amount is lower than the amount you originally owe. The more you’re willing to pay, the more likely the bank will work with you. (Note: A settlement will still reflect on your credit report, however, it’s still better than having a written off status on the report.) Once the bank agrees, wait for a written agreement before making any payment.
Check this: What Your Credit Report Says About You
Dispute Incorrect Information
There are chances that you may have incorrect information or errors in your credit report. There could be a mistake in your personal details like your PAN number, name etc. or latest status of settlement or current balance is not updated. In such cases, you can file a dispute with the bank or the credit bureau and submit relevant proofs to support your case.
Get your FREE Experian credit report here.
Ask For A Goodwill Deletion
Another way to remove a negative remark from your credit report is by requesting the current creditor for a goodwill deletion. In a goodwill letter, you ask the creditor to remove a record of late payments from your credit report. You can explain why you missed your payments and why the creditor should remove the remark from the report. There’s no guarantee your request will be accepted, but it’s worth a try.
Pay Off Your Debt
It would be ideal to be able to remove a bad debt entry from your credit report. However, if you fail to get it removed, the best option is to make the full payment anyway. Once you make the payment, wait for it to reflect in your credit report. This will show future lenders that you are financially responsible and it will increase your chances of getting a Loan or Credit Card in the future.