Removing Credit From Your Credit Report

thumbnail with caption "manage bad eidl debt" one side of the page has "bad credit with a red X and the other "good credit" with a green check.
portrait thumbnail with a PUG mug shot with a sign that says "i crewed a credit card" the title of the thumbnail is CAN BAD CREDIT DISAPPEAR.
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Have you been approached by people who claim they can repair or restore your credit and improve your credit score?

At some point in EVERY person’s life and career, your credit score will be reviewed, whether for financing, credit cards, insurance, or other applications.

We see how often this topic comes up in our business including, in our humble opinion, how people obsess over things they have no control over. This is one of the many reasons we started our Biz Glitch 366 Project

Spoiler alert: Bad credit, if it was truly your account,  absolutely CANNOT be permanently removed from your credit report. Period, full stop.

The Bottom Line: if a credit account reported on your credit report (whether good or bad) was truly your account, it cannot be permanently removed because at some point the investigation will conclude and the disputed information will be reported back onto the credit report.

We know that when certain activities in business operations require financing pursuits, this could become an emotional crusade because most people will get preoccupied with various concerns such as:

  • “Are they going to run my credit?”
  • “Will it be a hard hit?”

These are wasted emotions because if the credit precludes a business owner from proper financing channels to obtain working capital, the damage is already done. It’ll take longer to address the problem than the timeframe the business owner was expecting to finalize a deal to walk away with some cash.

Watch this one-minute video on removing defaulted and discharged loan obligations from your credit score and how to protect yourself from scammers.

Here are some credit basics to know, and the reasons why credit repair/restoration is a scam:

✅ Federal regulations allow a consumer to dispute an “error” on their credit history. Examples of errors can be a misspelled name, incorrect address, or credit account in the name of a family member with a similar name. These are the typical “errors” that absolutely can and should be disputed and absolutely can be permanently corrected on a credit report.

✅ A credit bureau (typically the “Big 3,” TransUnion, Experian, and Equifax) has 30 days to investigate and resolve or respond to the consumer’s dispute. During the dispute investigation period, the credit bureau is required to remove the disputed item until the investigation either proves the dispute to be accurate or proves the information to be correctly reported.

Often, the investigation period can take longer than the allowed 30 days. In that case, the credit bureau sends notification of the continuing investigation for an additional 30 days to remain in compliance with Federal regulations. The disputed item(s) remain “removed” as the investigation continues.

✅ If the dispute on a credit report is for a credit account, the credit bureau contacts the original creditor to provide proof of the validity of the account and reported information.

For example, if a consumer named Joan Maria Hall disputes a mortgage account that appears on her credit report because the account belonged to her mother, Joan Helen Hall, the credit bureau requests verification from the mortgage holder. Because the dispute can be verified as an account in a different person’s name, when the mortgage holder reports the correct name, the credit bureau is required to permanently remove the disputed account.

However, if the disputed credit account is truly in the name of the person filing the dispute, then the disputed account will be restored to the credit report once the investigation determines the account has been accurately reported by the creditor.

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✅ The “scam” of credit repair/restoration is the presentation of a credit report showing the disputed account(s) removed. What the scammers don’t tell the unwitting consumer is the investigation is still ongoing and the “clean” report is only the result of the temporary removal(s) of accounts and the 30-day extensions of the investigation period.

✅ Updating status: it is a worthy exercise to dispute credit accounts that report incorrect status. For example, if a collection account has been paid off, but the credit report shows the account as still “open” and not paid, then a dispute should resolve that account to show as paid.

Likewise, a single account might be reported incorrectly as multiple different accounts.

Here’s a 30-second video on how people are also falling for scams about removing EIDL from your credit report. Please stop listening to this nonsense.


Credit Advice: The Real Deal

We read an online article recently about credit and credit scores. The writer was complaining about how they couldn’t get approved for credit for a major purchase. He was denied due to a credit score of 575. In the article, he complained how this credit score is wrong, how the creditor who denied him must be committing fraud, and on and on. 

This article writer referenced a consumer-credit app that all too many people use, some “karmic” thing that purports to guide people on improving their credit histories.

Based on 30 years’ experience in mortgage banking and having read thousands of credit reports, my response to the author of the article and a commenter is below. We promise you, as you will see, credit ain’t a rocket science.

People in the world spend too much time focused on their credit scores, only to lead to the kind of frustrations experienced by the article writer referenced above. I’ve been giving this kind of credit advice for decades because we know it WORKS.

Our opinion is that consumers have been trained to spend entirely too much time focusing on credit scores. If you want a good credit report and good scores there are several basics to follow.

  1. Longevity counts. The longer your credit history (assuming on-time payments, no derogatory accounts, good utilization), the better your scores.
  2. You have 3-5 accounts open and ACTIVE at all times. Active means using that account every month: a car loan you’re paying, a credit card you use for groceries, a student loan (or more), a mortgage. Even if it’s only credit cards, 3-5 accounts is the standard for good scores in my experience.
  3. STOP paying off your balances to zero permanently and STOP paying off your credit card balances at the end of the month. Credit scoring relies on you actually USING credit. If your complaint is that you don’t want to pay the interest, fine, but don’t complain that your credit scores aren’t higher. It’s a scoring system based on USING credit over time. FYI: “time” does not mean monthly, rather over long periods of time, consistently. (See #1 above)
  4. Utilization. I know all the online “experts” say “Don’t use more than 30% of your available revolving balance.” What a bunch of scaredy-cats! We’ve seen thousands of credit reports thanks to Trevor’s financing career. He’s seen folks with up to 50% utilization of their available revolving balances with excellent credit scores. When you go above 50%, then it can get interesting. Depends on your overall credit history. Is it one account above 50%? Is it several? Did you just get a new house and mortgage? Did you trade in your leased-car last month? Yeah…interesting. (See #5 below)
  5. Credit is a “living breathing thing.” Not like as in a “monster” but certainly there’s an organic aspect to your credit history. There’s a lot going on there. That’s why it’s nearly impossible to control your credit scores no matter what all those “karma” websites will tell you. I have had many people I’ve worked with (including one right now) who are tweaking their credit based on what “karma” tells them to do with the flick of a finger on the screen of their smartphones. I just shake my head as I watch their frustration as to why in the longer term they’re not hitting the desired scores. There are no short cuts. A credit history determines your credit score. And a credit “history” is exactly that: a long-term project. (See #1 above)
  6. Yes, pay your bills on time. Duh. Note, a “late” payment reported to a credit report is for a payment 30 days late or more. If you pay two days after the due date, but within 30 days, you’ll incur a late charge, but not a derogatory “30 day late” mark on your credit report.
  7. If you’re planning on big purchases in the next few months, don’t close any accounts and don’t pay them down to zero. (See #3 above). If you’re not planning on big purchases, close those accounts you’ll never use again. But remember to keep open 3 to 5 accounts current and active, keep your utilization of revolving credit below 50% of available balance. Don’t zero out your accounts. Pay your bills on time.

You now have your open source access to how your credit scores are calculated. Now, with all that extra time on your hands from NOT monitoring your credit scores, order a pizza, pay for it with a credit card, give the delivery person a generous tip, and kick back and watch “The Queen’s Gambit” on Netflix (it’s AWESOME).

If you want to rebuild your credit, we’ve written an EBOOK with tactics and strategies to begin rebuilding your credit.

Here is my response to the author of this article:

I’ve [Trevor] been in finance for over three decades and I’ve read thousands of credit reports. 

Here are my observations and advice:

STOP wasting your time with that karma nonsense. It’s a rabbit hole that, in my professional experience, does very little to assist consumers with valid credit guidance.

Credit scoring and credit reports are “organic” to a certain extent: many moving parts shifting each month. That’s why the “karma” advice and others like it can’t work correctly all the time, or in the long term.

Credit scores update once a month. Period. Not daily, not weekly, not based on activity. Creditors choose to provide reporting information to the THREE credit bureaus (Trans-Union, Equifax and Experian). The accuracy of that information can often be questionable.

No consumer anywhere can obtain the same credit scores that we use in the financial services field. We use “CLASSIC” FICO scores. Even should you obtain your score from the FICO website, it’s not a CLASSIC score. 

I’ve seen differences of as much as 100 points in either direction between the consumer-access credit scores and CLASSIC scores.

Financing decisions are made using CLASSIC FICO scores by pretty much every credit-decision maker everywhere.

Creditors of all sorts (mortgages, car loans, credit cards, etc.) have varying criteria from one creditor to the next to determine creditworthiness.

Visit for great, legitimate, free advice on all things credit related.

NEVER ever, ever, ever, ever, ever, ever, EVER pay anyone to repair/restore/add trades to your credit report. I’ve met too many people over my career who have done that only for me to tell them months later how terrible their credit is and, no, I cannot approve them for a mortgage to buy a house. 

They respond with the kind of outrage you express in the article. Those credit “repair” people are scams, IMHO. I don’t care if they now appear as “legitimate” on the FTC website: I haven’t seen a single case where those types of services assisted a consumer in the long term. 

And credit is LONG TERM.

As for people offering to add trades to your report: dunno, but that sounds incredibly fraudulent to me.

The Truth About Credit “Repair”

The most fundamental truth and reality check is this: a consumer cannot “remove” an account that is legitimately your account that is showing on your credit report.

While the account may appear to removed during the dispute process on the report provided by the credit bureau, the reality is that account is most likely to return to a credit report at some time in the future because it’s your account.  This is true whether it’s a positive or negative account.

In other words, if that account was truly yours to begin with, it’s going to reappear at some point on the credit report.  The confusion arises from the dispute process. During the dispute, the credit bureau is required by law to remove the disputed account from the credit report while they investigate the validity of the information with the original creditor.

Often, the bureau provides an updated report showing the removal.  And the investigation process, required to be only 30 days by law, often takes longer. Thus, the credit bureau “extends” the 30 day investigation period, and representing to the consumer that the information has been removed during the investigation.

This is the part where you need to pay attention.

This is one of the major frauds of the entire credit repair concept.  Once the credit bureau receives the accurate information from the original creditor, that account goes back onto the credit report.

A credit report can only be “repaired” to the extent that incorrect information can be amended to accurately reflect:

  • Correct status of an account (such as paid)
  • Removal of a duplicate account (often happens when a minor discrepancy in account balance or account number is reported by the creditor)
  • Removal of an account from a family member with the same name that appears on your credit report (John Jones Sr. mortgage appears on John Jones Jr. report)
  • Correct name misspellings or home addresses, and other personal identifying information of that nature.

Closed accounts aren’t necessarily the problem with improving a credit score.  That’s only one component of the overall scoring algorithm. What most consumers with decent credit misunderstand is their use of their current accounts. Such as, the more legacy accounts you have open and active today, with 50% or less utilization (relative to credit limit) and an on-time payment histories, will generate a better score.

Even with a higher utilization of 50% or more on several revolving accounts, assuming 3-5 active accounts with two years or longer histories and active use, scores can be very good and even excellent.

Please reach out for any further clarification. This is where we see most consumers flail with thinking through the process of “repair” and/or hiring someone to manage the minutia, which will only result in frustration and regret.

When we work with our business financing clients, we include a merged credit report with Classic FICO scores from Experian and Equifax as part of our qualification process from the very beginning.

Most Lenders won’t run a credit report until late stages of the loan application process. Our method helps us to understand and advise the business owner of any challenges on the credit report that may impinge on our ability to secure financing from a Lender.

Trevor, our Chief Financing Rock Star, was a Mortgage Banker for 30 years; credit is one of his areas of special expertise.

Download our E-Book, “Rebuilding Your Credit After COVID”.

Maybe you haven’t filed for bankruptcy; you will still pick up some tips in this ebook.

You Want to Repair Your Credit

We want you to have peace of mind that, should you need to apply for business financing, you’ll be prepared to keep your business going through this or any unexpected crisis.

If you are considering business financing in the future, or simply want to know what to do and how to go about applying for business financing, Aurora Consulting offers a flat fee consultation to help navigate the bumpy road, the treacherous waters of financing.

We review all aspects of what’s required in a loan application including your credit report, financial statements, business plan and marketing plan. We review with you items in your credit report and what happens when you try to repair your credit.

Our consultation includes a credit report with real credit scores from Equifax and Experian.  These are the “Classic FICO” scores only available to financial services institutions.  These scores can be radically different from the scores available to consumers.

When we run the credit report, we assess any challenges that could affect your loan application in the future.  More importantly, we’ll give you the correct advice, based on decades of experience in lending and based on current experience working successfully with Lenders on business loan applications, to address any challenges on your credit report.

What makes us crazy is when a new prospective client says, “I’m holding off for now because I want to take care of my credit report.”

There is no way a business owner can know what is acceptable and what is unacceptable to a Bank for business financing.
We can, and we do know.

Worse, in our experience, more often than not, people take actions to “take care” of their credit that actually does not help them in the business loan process. Sometimes, what they think they’re doing to help, makes their credit worse!

4 things NOT to do with your credit report:

  1. Don’t pay off Collection or Charge Offs or Judgments. Many times these accounts don’t affect a loan approval depending on type of account and amount.  Plus paying these accounts off can lower your credit score dramatically.
  2. Don’t pay down credit card balances.  You may pay down the balance to a level that seems worthy, but actually could have a negative effect on your score.
  3. Don’t pay credit card balances to zero.  If an account has a zero balance, the credit scoring system has nothing to score!
  4. NEVER pay anyone to “repair” or “restore” your credit. According to the Federal Trade Commission, you’re paying for something you can do yourself. And the “guarantees” these companies offer often fail to materialize. Read this article for credit repair scams.

Download our EBOOK on how to rebuild your credit. This information was curated after 30 years of reading thousands of credit reports.