How To Remove Negative Items From Your Credit Report
First, it’s important to know your rights when it comes to the information in your credit history.
Under the Fair Credit Reporting Act , credit bureaus and lenders must ensure that the information they report is accurate and truthful.
This means that, if you find mistakes in your , you have the legal right to dispute them. And, if the information disputed is found to be incomplete or erroneous, the bureaus are obligated to remove it from your record.
Some common credit report errors include payments wrongly labeled as late or closed accounts still listed as open. It’s also possible for your report to include information from someone else, possibly someone with a similar name, Social Security number, or identifying information.
Bear in mind that correct information cannot be removed from your credit report. So, if your score is being dragged down by accurate negative information, youll need to repair your credit over time by ensuring you make payments on time and decrease your overall amount of debt.
Here are some tips to help you repair your credit history:
Work With A Credit Monitoring Service
Too often, consumers fail to monitor their credit rating, finding out about severe penalties only after they are too late to reverse. Using a credit monitoring service may help you stay on top of your credit report, as these companies alert you to any changes within your report as soon as they occur.
The best companies for credit monitoring also provide helpful tips for rebuilding your credit score following harsh penalties such as bankruptcies.
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Lexington Law is now offering $50 off the initial set-up fee when you and your spouse or family members sign up together. The one-time $50.00 discount will be automatically applied to both you and your spouses first payment.
Active military members also qualify for a one-time $50 discount off the initial fee.
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Bankruptcys Impact On Your Credit Score
When you file bankruptcy and get relief from your bill problems, you no longer owe any money to your creditors. You no longer have to suffer with the continuing delinquencies.
If you take some simple steps to rebuilding your credit after bankruptcy, your credit score will start to rise pretty quickly. After as little as 18-24 months, your credit report will be a thing of beauty.
In fact, according to a report released by the Federal Reserve Bank of New York in May 2015:
The individuals who go bankrupt experience a sharp boost in their credit score after bankruptcy, whereas the recovery in credit score is much lower for individuals who do not go bankrupt.
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Send A Procedural Request To The Credit Bureaus
If the bureau can verify the bankruptcy, your next step is to send a procedural request letter asking who they confirmed the bankruptcy with. Most often, credit bureaus claim to verify bankruptcies with the courts, regardless of whether they actually did or not.
Once you determine how the bureau verified your bankruptcy information, you can now check to see whether this verification was valid.
Should I Hire A Credit Repair Company Or Do It Myself
While the steps above may sound simple enough, they typically involve a lengthy back-and-forth process with the credit bureaus, courts, and other entities. Often, when people attempt to dispute items on their reports themselves, they fail because they do not have the necessary time or expertise. They become overwhelmed and frustrated with the process, leading them to give up.
Hiring a credit repair company is a more effective way to tackle credit report inaccuracies. have the knowledge, resources, and time needed to give customers the best chances of successfully disputing inaccurate items. They know what types of errors to look for and the most effective ways to inform creditors of these errors.
If you want to have the best chance of removing a bankruptcy from your report, we recommend working with a reliable credit repair specialist. CreditSaint.com is our top recommendation.
However, if you genuinely believe that your bankruptcy record is in error, you may want to hire a bankruptcy attorney to represent you instead. Alternatively, if you are currently going through the legal process of bankruptcy, a bankruptcy lawyer can provide legal advice and help you receive the best outcomes from your case.
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How Long Can A Debt Be Chased
If you do not pay the debt at all, the law sets a limit on how long a debt collector can chase you. If you do not make any payment to your creditor for six years or acknowledge the debt in writing then the debt becomes ‘statute barred’. This means that your creditors cannot legally pursue the debt through the courts.
Check Your Credit For Inaccuracies
You need to look for any inaccuracies that may be part of the bankruptcy entry. You will want to look very carefully for any mistake.
- Identity information
- Accounts that may belong to another person with the same or similar name
- Incorrect accounts that occurred from identity theft
- Closed accounts reported as open
- You are reported as an owner of an account but are only an authorized user
- Accounts incorrectly reported as late or delinquent
- Incorrect date opened, date of last payment, date of delinquency
- Same debt listed more than once
- Accounts that appear multiple time with different creditors listed
- Incorrect current balance
- Incorrect credit limit
There may be other inaccuracies you find as well the important part is to look closely and pay attention to detail.
If there are any inaccuracies, you simply dispute the bankruptcy entry with the credit bureaus, saying the information is incorrect and therefore should be removed.
Dispute via letter with the mistakes explained and make sure to send to each bureau. If there are no inaccuracies, move on to the next step.
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How To Build Your Credit After Filing For Bankruptcy
If you are one of those people who want to swear off credit altogether, this is actually a bad idea. You want to rebuild your credit score after bankruptcy even if you dont have any immediate plans on making big purchases. This is because when you have a good credit score, it gives you access to better deals and savings. You dont have to pay deposits or high-interest rates when getting necessary services like utilities and cell phone plans.
So, how can you rebuild credit without going under debt again? Here are some practical tips.
Curious About Your Bankruptcy Status
You can get a free copy of your current credit report once a year Ã¢â¬â be wary that checking too often can harm your credit score.
If you see a bankruptcy record that should not be there or any bankruptcy paperwork has a mistake, a bankruptcy attorney can give you an honest idea about how long the repair process will take.
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Finding The Right Lawyer
The first step to filing for bankruptcy is to find the right lawyer. While you can try to go through the process on your own, it would be a bit like representing yourself in court i.e. youd have a fool for a client. According to Hoorfar, a lawyer can help you in the following ways.
-Advise you on whether you need to file bankruptcy and, if yes, which chapter to file.
-Educate you on bankruptcy law and procedures.
-Help you file bankruptcy forms.
-Give you an idea of what debts you can discharge.
-Advise you on whether youll be able to keep your house, vehicle, or any other property in bankruptcy.
-Tell you the tax consequences of filing a bankruptcy.
-Assist you wherever you need any help until you get discharged from your debts.
When looking for a lawyer, Wesley M. Scott, a Managing Partner at the Minnesota bankruptcy law firm LifeBack Law recommends that you choose only bankruptcy law firms that are within your state and do nothing but Chapter 7 and 13 Bankruptcy work.
Additionally, Scott says you check out their reviews and then interview them. Do you feel welcomed and informed? If not, trust your gut and interview other lawyers.
Report Credit Repair Fraud
State Attorneys General
Many states also have laws regulating credit repair companies. If you have a problem with a credit repair company, report it to your local consumer affairs office or to your state attorney general .
Federal Trade Commission
You also can file a complaint with the Federal Trade Commission. Although the FTC can’t resolve individual credit disputes, it can take action against a company if there’s a pattern of possible law violations. File your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.
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How To Remove A Bankruptcy From Your Credit Report Quickly
Sometimes, finances can get the better of us. Debt can begin to accumulate, or the economy changes, and you end up in an impossible situation. Filing for bankruptcy can help get you out from underneath the worst of it, and it might seem like an easy solution. However, the record of bankruptcy can hang around.
As unfortunate as it is, bankruptcy can make it difficult to build back what you might have lost. Your credit score inevitably drops after filing for bankruptcy. The presence of it on your record can make it difficult to borrow in the future. However, it is possible to remove it.
Bankruptcy filings indicate personal information about youlike your official name or social security number. As such, any errors in the record can be a cause to expunge the record of bankruptcy.
While this can be difficult, this article explains the essential things you need to know about bankruptcy. We go over its effect on your credit score and how to get it dropped from your record.
Bankruptcy promises to give you a chance to start fresh. But, so long as the record prevents you from recovering your previous credit score, it can be challenging. These sections will outline how to remove bankruptcies from credit reports. With these simple steps, you can clear your record and start fresh.
The Credit Repair Organizations Act
The makes it illegal for credit repair companies to lie about what they can do for you, and to charge you before they’ve performed their services. The CROA is enforced by the Federal Trade Commission and requires credit repair companies to explain:
- your legal rights in a written contract that also details the services they’ll perform
- your three day right to cancel without any charge
- how long it will take to get results
- the total cost you will pay
- any guarantees
What if a credit repair company you hired doesn’t live up to its promises? You have some options. You can:
- sue them in federal court for your actual losses or for what you paid them, whichever is more
- seek punitive damages money to punish the company for violating the law
- join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney’s fees
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Send The Courts Response To The Credit Bureaus
Send the statement from the court to the credit bureaus with a letter asking to have the bankruptcy removed. Mention that the bureau knowingly provided false information and has violated the Fair Credit Reporting Act.
If all goes well, removal of bankruptcy should occur.
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Ask The Credit Bureaus How The Bankruptcy Was Verified
If the bankruptcy is verified by the , you will next need to send them a procedural request letter asking them who they verified the bankruptcy with.
In some instances, they will claim it has been verified with the courts, even if it is not. In most cases, the courts do not verify bankruptcies for the credit bureaus.
If the credit bureau claims it was verified with the courts, then proceed to step 4.
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Get A Secured Credit Card
If you dont mind making an initial deposit to access your credit line, a secured credit card may be right for you. Theyre another great way to help rebuild your credit after bankruptcy and function just like unsecured credit cards. However, they sometimes come with hefty APRs and administrative fees. And the creditor holds your deposit until the account closes or the creditor extends an unsecured credit card offer to you.
Keep Your Credit Utilization Ratio Low
Another key credit score factor is your it accounts for 30% of your FICO Score. Your credit utilization ratio measures how much of your credit you use versus how much you have available. For example, if your available credit is $10,000 and you use $2,000, your credit ratio is 20% .
Although its often recommended that you keep your ratio below 30%, you may be able to rebuild your credit faster by keeping it closer to 0%.
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What Happens After Bankruptcy
Its almost certainly going to be hard to get any kind of loan or credit once you have a bankruptcy on your record.
However, here are some things you can do in order to start the process of rebuilding your credit.
It wont happen overnight. Therefore, its important to understand that its going to take time.
There is an old riddle you may have heard: How do you eat an elephant? One bite at a time.
How Bankruptcy Affects Your Credit Score
As you might suspect, filing for bankruptcy has a negative effect on your credit report and score, as Hoorfar says an individual with a 780 or greater credit score can lose about 200 to 240 points due to bankruptcy.
While bankruptcy might seem like a final option for many, its not the death blow to your credit score that it might seem.
In my opinion, filing bankruptcy improves your credit profile. This is hard for some people to understand. But I ask them how is your credit now? If you have a 100k in credit card debt and you are delinquent on your payments, your credit already stinks, says Scott. Even if you are current on your 100k in debt payments, and your credit score is high, to me, you are a poor credit risk. Why? Because if I am a future lender do I really want to climb on top of this pile of debt and risk that I might be the straw that breaks the camels back and you file bankruptcy?
Scott adds that at the end of the day, having less or no debt is better than having 100k in debt. Future lenders dont care if you are currently $100k in debt. What they truly want to know is will you be able to pay the loan I give you now?
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Can I Rebuild My Credit After Bankruptcy
You can rebuild your credit after bankruptcy, but its a long process. Your options will be limited at the start, but it is key to not get discouraged. As time goes on, if you consistently pursue a credit rebuilding strategy, your reports and scores can improve.
Here are some recommendations to start with:
- Understand the cause: Identify, accept, and learn from the root causes of your bankruptcy so you wont find yourself in the same position down the road.
- Stick to a budget: Re-evaluate your finances and see where you can cut expenses and save more money if you can.
- Start establishing a new credit history: No, this does not mean using an alias . It means starting fresh with whatever credit you can obtain.
This may mean settling for an extremely high-interest rate, taking on a co-signer, depositing cash into a secured credit card, or other options that have been designed specifically to help you re-establish a positive credit record.
Use these credit options sparingly and never put more on a card than you can pay off by the end of the month so your credit improves over time.
How To Remove A Bankruptcy From Credit Report
*This is not a financial advice article. Speak to a professional financial advisor if needing financial assistance.
Your credit report is a valuable tool that lenders and other financial entities use to determine your financial responsibility. Unfortunately, filing for bankruptcy can negatively impact your credit report and knock your credit score down by several hundred points.
In most cases, a bankruptcy will remain on a credit report for several years following the filing date, continuing to affect your credit score for about a decade. However, if your bankruptcy record has mistakes, due to identity theft, or is an error, you may be able to have it removed from your credit report early.
Continue reading to find our step-by-step guide to attempt to remove a bankruptcy from your credit report, then read our tips about how to potentially rebuild your credit following a bankruptcy filing.
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