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How to Clean up your Credit Report


In order to get financing for your small business, you have to have good credit and a good credit score. There are often errors on credit reports. It's important that you get a copy of your credit report from all three credit reporting agencies and correct any errors that you find.
Difficulty: Average
Time Required: Indefinite

Here's How:

  1. You are entitled to one free credit report each year. There is a website where you can request that annual credit report and you will receive it free of charge from each of the main credit reporting agencies. Those credit reporting agencies are Equifax, Experian, and Transunion.

    You don't have to request your free annual credit report from each agency, however. Requesting your report from the free annual credit report site stated above is all you have to do and you will automatically get it from each agency.

    Request this free annual credit report each year to keep your good credit intact.

  2. If you have been in business for awhile, you not only have a personal credit report, you also have a business credit report. You can request your business credit report from the three credit reporting agencies along with your personal credit report. In fact, you need to be sure there are no errors on your business credit report just like you need to be sure there are no errors on your personal credit report.

  3. If you are looking to seek financing for your business, the first thing you should do is stop applying for credit cards, loans, or lines of credit immediately. If you are declined for any of these, it is a negative on your credit report. The more credit you have on your credit report, the lower your credit score will go.

    The process of cleaning up your credit and credit report takes awhile so stop adding to your debt before you even order your free credit report.

  4. Every time you apply for credit, it appears on your credit report. If one company declines your application, chances are other companies will as well. If you have too many declined applications, that is a huge negative on your credit report just like too many applications for credit is a negative. It makes you look desperate for credit. It also makes you look like you might be an irresponsible user of credit.

  5. After you get your free credit reports, business and personal, from all three credit reporting agencies, go through each report line by line. You will see a list of each debt you have now and have had in the past. Be sure that each debt you have had in the past shows that it is paid off. If you have closed those accounts, you want your credit report to show that. If you have not closed those accounts, your credit report should reflect that as well.

    So, check first for closed and open accounts. If you have paid off an account or closed an account, be sure your credit report reflects the correct information.

  6. If you have paid off an account and closed it, be sure that your credit report notes that it was closed at your request, not by the company. If an account was closed by a company, that is a blemish on your credit record. If this was reported incorrectly, call this to the attention of the credit bureaus.

    You need to send this information to each credit reporting agency that shows the erroneous information.

  7. Next, check each account that is open for your record of late and on-time payments. If the credit bureau has incorrectly reported a payment late that was made on time, you need to bring that to their attention. Any late payment is a problem and will bring down your credit score. You will need to have documentation to prove that you made any payments reported late on time. If you can explain any late payments, do that in a letter, accompanied by documentation, such as a canceled check.

    You need to send this information to each credit reporting agency that shows this erroneous information.

  8. You may have inquiries on your credit report. Inquiries reflect who has viewed your credit report over the last two years. If there are inquiries that you can explain, do so in a letter.

    Send your letter to each credit reporting agency that show the inquiries. Credit reporting agencies often show different information which is why you have to go over each of them.

  9. After you find all the errors on your credit report and items you can document and/or explain, circle them in red. Write a letter to all three credit bureaus explaining each item and pointing out the errors. At the same time, write a letter to the company to whom you owe or owed the debt explaining the problem. Enclose a copy of your credit report and a copy of any documentation or explanation you have with the letters to the credit bureaus and the company involved.

  10. You may have received a Request for Investigation Form when you received your credit report. If you did, fill out that form to submit to the credit reporting agencies and attach your letter of explanation and any documentation you may have. After you submit your Request for Investigation and/or your letter and documentation, the credit reporting agencies have 30 days to respond.

    If the reporting agencies have not responded within 30 days, send a followup letter and contact the Federal Trade Commission for help with resolution of the matter.

  11. Be sure and go over each credit agency report for your business and personal accounts separately as they will likely have at least some different information. Respond to each separately with errors circled in red, letters explaining errors and inquiries, and any documentation you have.


  1. Do not be sucked into some credit counseling scheme where some agency wants to repair your credit for you. You can do this yourself by following the procedure I just outlined. YOu don't need to pay to have it done. Credit counseling agencies often do more harm than good and can actually hurt your credit.

  2. The process of going through each credit report and responding to both the credit reporting agencies and the companies involved is time-consuming but absolutely necessary in the end. What's more, it's free since you will do it yourself!

What You Need

  • Free annual credit report from the three credit reporting agencies
  • Any documentation you may have kept on disputed bills or late payments
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