Getting That Little Negative Mark Off Your Credit Report

Goodwill deletions and other tips for boosting your credit score.

Do one thing: Make sure you are reviewing your credit reports regularly to ensure that the information is accurate. After all, you can’t fix what you don’t know about.

When it comes to our credit scores, it pays to know where you stand at all times. After all, the higher your score, the more you can potentially save on mortgage rates car loans, insurance premiums, and rent. If you are curious about where you stand — and want to know more about how to improve your credit score — there are a variety of steps to take to stay on solid ground.

Know Your Score
Generally speaking, the two main U.S. credit scoring agencies – VantageScore and FICO – translate the range in similar ways.

Here’s how VantageScore 3.0 breaks down credit scores by category:

• 300-600 = Very poor
• 600-660 = Poor
• 661-720 = Fair
• 721-780 = Good
• 781-850 = Excellent

How Do You Compare?
The average VantageScore 3.0 was 700 in October 2023, according to an analysis from VantageScore. The average FICO score was 717 in October 2023 – down from 718 three months earlier – according to data reported by FICO.

Multiple Scores
It’s important to note that most Americans with credit have more than one score. Why? VantageScore and FICO offer dozens of different scores to companies based on what those firms want to know about consumer spending habits and payment histories. A mortgage lender may require different credit history details than a landlord or potential employer, hence multiple scores.

Keep Track of Scores
And no matter where you may fall on the credit score scale right now, it’s a good idea to keep track of your score and strive to keep it in a solid position. So if you find yourself with a pretty good score, but you’ve got one little issue that you can’t seem to overcome, it might be time to consider asking for a goodwill deletion.

What’s a Goodwill Deletion?
A goodwill deletion, which can also be called a goodwill letter, is when you ask a credit card company or other lender to remove a negative item from your credit report. The idea is that if the spot is removed, your score could improve. It’s important to go into this with the understanding that this is the creditor’s “goodwill” and they don’t have to honor your request. But, if you’re polite, you could potentially get the negative mark deleted.

Prepare to Write
Before you begin writing, do some research. The internet is filled with examples of how to pen a goodwill deletion letter, so take a few minutes and find a template that works for you. You may even want to jot down some notes on the points you need to make. Then, locate the address of the credit card company or lender where the negative item originated, which can usually be found on your credit card bill or other loan statement.

Get It On Paper

• Reference your account number and the date of the negative occurrence on your credit report.
• Make sure to state the purpose early on in your letter.
• If you had a spotless payment record other than one late payment, mention that.
• Explain what happened to create the negative mark. (If you lost your job or were ill, say so.)
• Detail the steps you are taking to make sure it doesn’t happen again. (Implementing automatic deductions, etc.)

Ask for Advice

To show you are earnest in your request, you can also ask a credit issuer or lender for advice on improving your credit score. Some companies may offer a specific program you can take part in that can help.

How Long Does It Take For a Bad Mark To Go Away?
Some negative credit information can stay on your credit reports for seven years or longer. Details about a lawsuit or a judgment against you can also be reported for seven years or until the statute of limitations runs out – whichever is longer – notes the Consumer Financial Protection Bureau. And bankruptcies, unfortunately, can stay on your credit reports for up to 10 years.

Other Ways To Improve Your Credit Scores
Besides writing a deletion letter, there are other ways to boost your credit scores right now.

• Pay all of your loans on time, every single month.
• Keep balances low. Only use 30% or less of your total available credit.
• Don’t apply for lines of credit you don’t need.
• Keep older accounts open, unless you’re being hit with high fees. If that happens, call the issuer to see if you can switch over to a low or no-fee card.
• Fact check your credit reports every few months – or use the SavvyMoney tool – to make sure no errors are dragging down your score.

Jean Chatzky/SavvyMoney

June 2024