A week or so ago, Ellen Roseman, wrote a column in the Toronto Star about cleaning up errors in your credit report. This resulted in a small deluge of emails from readers with their own personal tales of woe. Ellen asked me to help respond to a few of these, and she published some of the cases on her personal blog on February 21. Here’s the first one:

How can I get a trade item off my credit score? It was a car that was returned. I made a settlement and made the payment. Now it is on my credit report and will remain there for another few years. Since I made the settlement, is there any way I can ask Trans Union and Equifax to delete it? Thanks, from Scott.

I replied,  whatever it was that he did, it will remain there for six years since the settlement date. His concern should be that its status is correctly shown as settled, or paid or equivalent words – and not bad debt or write off or the like.

It might appear in two different places in his report – first in the list of trade lines near the beginning AND near the end under other items such as Collections.

He should check to see they are both reported with consistency – if it does not show in the second place at all, let sleeping dogs lie.

Finally, it’s quite probable that prior to settling the car, he incurred late payments, perhaps 30, 60, 90 or even 120 days late. Those late payments will also stay on his report.

Difference being their six-year drop off schedule is tied to the month and year of each actual late payment, as opposed to the date of settlement, which was presumably later.

Depending on the specifics of his case (how many late payments, how late they were and verbiage about the settlement), the black mark on his report may have less of an impact than he fears.

The more time and distance from the negative event, the less dramatic the effect on score. And provided the item is listed as settled and not written off, it should not preclude him from qualifying for mortgages, car financing and so on.

Ellen Roseman is well known as a consumer advocate, with an impressive pedigree in financial journalism. She writes regularly as a personal finance columnist for the Toronto Star, and maintains a popular blog at www.ellenroseman.com. Her first book, titled “Consumer Beware” was published in 1974, and now with the January, 2013 release of “Fight Back,” she has authored seven books over a remarkable span of almost forty years.

Tip of the Day

For people that can afford it, consumer proposals are often a better option. It allows them to avoid a bankruptcy and to make some payments to their creditor

— Money Matter № 132
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