A relatively reasonable 30 to a whopping 90 percent of credit reports are said to have some inaccuracies. If you find substantial errors on one report, it's important to obtain, check, and clear all three reports individually. To clean up your credit reports, do the following:

• Write a letter to each of the three credit reporting agencies listing the errors.

• Attach copies of supporting documentation (cancelled checks, statements).

• Send the letter via certified mail, return receipt requested.

• Keep a copy for your files, and attach the receipt confirmation when it arrives.

• Follow up with telephone calls, if needed. Write down their name, the date, time, and gist of the conversation and put that documentation in your file.

Keep in mind that you're dealing with a bureaucracy that isn't in the business of correcting reports. You will need to follow up religiously and hound them until the corrections have been made. Once the corrections have been made, the credit reporting agencies are required to send you a copy of your corrected report free of charge. If you request it, they are also required to send the updated report to anyone who received it in the last six months, or, if the requester was an employer, the last two years.

Once a disputed item has been removed, the credit agencies are not permitted to put it back on your report without sending you written notification and alerting you to the name, address, and telephone number of the creditor submitting the item. You are always free to write directly to the creditor to dispute the information. You can place a copy of this letter in your credit file. Once you have written to the creditor, they are also required to include a notice of dispute if they submit the information again. If the disputed item was not verified, the creditor is not permitted to submit the item again.

If They Are Your Debts

As far as legitimate items that reflect badly on your credit worthiness, you can make efforts to improve them. Bankruptcies will sit on your report for 10 years; missteps like late payments will stay for seven years. Criminal convictions may remain in place for decades, as will applications for jobs that pay over $75,000 (which may require a background and credit check by the employer) or applications for credit or life insurance over $150,000.

Even if you were guilty of late payments, overdrafts, or long-running delinquencies, you can still write to the credit agencies requesting that they verify the negative posting. In some cases, the entries may be so old that the creditor may not verify the entry, which means they will remove the item from your credit report.

Pleading Your Case

Creditors are not required by law to report everything pertaining to your account. You can certainly write to the department store, utility company, or credit card company to plead your case. Perhaps you were unemployed for three months back in 2002 and ran late on your accounts. If you write to the creditors noting that you have been an excellent customer — who has paid $1,200 in interest payments, and who rectified that situation and has kept the account current for the past three years — they may opt to remove the negative report.

If you are still a customer, don't hesitate to play upon that advantage, noting perhaps that you receive credit card offers constantly and may consider closing your account if they are unwilling to help you restore your good credit standing. Always begin by being very polite, yet straightforward. You'd be surprised how many times the creditors will do what you request.

Should You Settle Old Accounts?

If you have a long-standing unpaid bill, and you are applying for home financing, you may want to offer a settlement in return for a clean slate. Creditors often leap at offers to pay half of the original amount, particularly if it's been hanging out there a long time. If you do this, however, it is vitally important that you request a letter from the creditor agreeing to the terms of the settlement in return for wiping the slate clean.

Don't pay them until you have a written record that they are accepting this payment as final payment on monies due. You want them to report that you are “paying the account in full.” If they fail to clear your credit report, you will need this letter to clear it.

Also, if you have a lot of old debts, it may be wise to hire a lawyer to negotiate repayment. In some cases, the old debts may disappear seven years after the last payment, and inquiries may reopen them. Lawyers will know how to negotiate settlements without stirring up the dust, which could save you hundreds, or thousands, of dollars and prevent negative items from reappearing.

If All Your Efforts Fail

If singing your sad (but true) songs fail to motivate the creditors to assist you, the Fair Credit Reporting Act allows consumers to write a short explanation disputing or explaining the history to the credit reporting agencies, who are required to place it in your file. Keep it simple and no longer than 100 words. Sample notations might read as follows: “Late payment was due to move and subsequent lost mail”; “Laid off from work for six months, caught up all accounts upon returning to work”; “Emergency occurred while out of the country, tripled payments upon return.”

You can also write positive notes that the agencies are required to send to all inquiries. Samples would include things like these: “I received a $10,000 raise in 2005,” or “I earned an extra $7,000 in sales commissions in the first quarter of 2006.”