How To Remove Bankruptcies From Your Credit Report

Bankruptcy As A Result Of Fraudulent Activity

Perhaps cybercrime and fraud would be a thing of the past someday, but for now, it’s part of life, and you wouldn’t know if you’re the next victim.

While the effects of bankruptcy that emanated from fraud may be similar to those emanating from legitimately-filed entries, you need to challenge it with three credit bureaus.

If you find something weird in your report, you should file a dispute using a letter with a statement from the court of record.

The preliminary step is contacting the court and requesting them for a written verification that you didn’t have a bankruptcy on your file. If the court has a recorded bankruptcy, you’ll need to work on resolving the issue first.

Obtain the relevant documents from the court then forward them along with copies of your identification using certified mail to the three credit information centers.

Usually, it might take a couple of weeks for the bureaus to record modifications on your reports which applies if everything you sent is accurate and up to date.

This may seem like an incredibly hard task, but you certainly don’t want to pay lots of bucks for a mistake you didn’t make.

Get A Free Copy Of Your Credit Report

The Fair Credit Reporting Act promotes the accuracy and privacy of information in the files of the nations credit reporting companies. Monitoring your credit report is a necessary practice to keep in check any negative information. Consumers should obtain their free credit report and review it at least once a year to catch any irregularities on time and keep track of disputed items.

Consumers are entitled by law to a free annual credit report from each of the three main reporting bureaus: Equifax, Experian, and TransUnion, and you can access all three of them through one single website:

AnnualCreditReport.com is the only authorized website through which you can gain free access to your credit report from the three major bureaus. Be wary of other sites that promise the same, as they may have hidden fees, try to sell something, or collect personal information.

Equifax made headlines in 2017 due to a massive data breach, but it remains one of the top 3 services to get your credit report. The company provides a few different service levels if you want to monitor your credit score monthly . Monitoring packages start at $14.95 per month, and the $19.95 per month options include, ironically, a host of identity-theft protection options.

Impact Of Identity Theft On Your Credit Report

Identity theft occurs when someone steals your personal information and uses it to apply for new lines of credit. If these new accounts go into default, they will appear on your credit report and hurt your score.

Cleaning up your credit after identity theft can take anywhere from a day to several months or even years. The longer it takes you to realize someone stole your identity, the more difficult it will be to undo the damage. Monitoring your credit report will help you to stay on top of potential fraudulent charges.

Also Check: How Many Times Has President Trump Filed Bankruptcy

Will Your Credit Score Stay Poor Until Your Bankruptcy Is Removed From Your Credit Report

One common misconception is that your score will remain poor during the duration the bankruptcy is on your credit report. This is not true at all. In fact, you can start rebuilding your credit after your debt is discharged. According to bankruptcy experts, there is even a chance that your score will go above 700 after four to five years.

Different Types Of Bankruptcies

There are many types of bankruptcy. The most common for individuals and small businesses are Chapter 7 and Chapter 13.

The differences between the two are essential to note. They determine your options for how to remove bankruptcies from credit reports. Ultimately, its the different maximum duration on your records and the repayment plans that determine how much your credit scores drop.

In both cases, it might be prudent to consult a bankruptcy lawyer or consultant. Legal advisors can help you to understand the details of each plan. Knowing the details of the type of bankruptcy can help in understanding how to contest the procedure. Plus, it will help you assess how bankruptcy affects your credit score in the long run.

Also Check: How Do You Declare Bankruptcy In Canada

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

Related: Does a Car Insurance Quote Affect My Credit Score

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.

Bottom Line: How To Remove A Bankruptcy From Your Credit Report

A bankruptcy on your credit report isnt the end of the world, but it can put a damper on things for a while. Youll lose 100 150 points on your credit score, but if you play your cards right, you can bounce back.

If you know the information reported on your credit report isnt accurate, though, you have every right to dispute it and have it removed from your credit report.

More Credit Resources:

Don’t Miss: How Does Bankruptcy Affect Tax Refund

Can A Dismissed Bankruptcy Hurt Your Credit

Whether your bankruptcy is dismissed or your debt is discharged, the 3 major credit bureaus treat bankruptcies the same. That means even if your debts aren’t cleared by bankruptcy, your credit score can nose dive up to 200 points! It gets worse. It can stay on for up to 10 years. So what can you do?

Become An Authorized User

Another strategy for boosting your credit score is to become an authorized user on someone elses account.

If you know someone with good credit, ask them to add you as an authorized user on one of their credit cards.

If you choose this strategy, youll want to make some kind of agreement to pay your share of the card balance.

You should also make sure the creditor reports your payment history to the credit bureausyou can verify this by contacting the credit card company and asking if they report an authorized users payments to the credit bureaus.

Don’t Miss: How Many Times Can An Individual File Bankruptcy

When Is Bankruptcy Removed From Your Credit Report

A Chapter 7 bankruptcy can stay on your credit report for up to 10 years from the date the bankruptcy was filed, while a Chapter 13 bankruptcy will fall off your report seven years after the filing date.

After the allotted seven or 10 years, the bankruptcy will automatically fall off your credit report.

Waiting For A Bankruptcy Removal From Your Credit History

Once you wait seven to 10 years, the bankruptcy public record will automatically be deleted, and future creditors won’t be able to see it.

The individual accounts that had the debts may have already been deleted during the bankruptcy discharge and bankruptcy plan phase. In some cases, these accounts must remain on the credit report.

The best thing to do is build credit while waiting for the bankruptcy record to clear, follow repayment plans, and avoid more debt.

Also Check: When Does A Bankruptcy Come Off Credit Report

How A Bankruptcy Filing Affects Your Credit Score

When you file for bankruptcy, your credit score will drop. The range of the drop is usually 130 to 240 points. Typically, people who have a higher credit score of over 700 points lose more points. If you already have a poor credit score, the deduction of these points may not really affect you that much.

When you have a bankruptcy on your credit score, it can be difficult to get approval for new credit and get the best deals people with excellent credit scores enjoy. For example, if you are planning to get a cell phone plan with bad credit, you will not be eligible to get the best deals available that require no deposit or no upfront fees. If you have bad credit due to a bankruptcy, you may have to settle for a no credit check cell phone plan where you have to buy the device in full and prepay your usage.

How To Remove Bankruptcy From Credit Report

Each year, close to half a million of Americans file for bankruptcy.

Bankruptcies could stay in your report for up to a decade, depending on the category of the bankruptcy.

As a financial red flag in handling credit, assuming that bankruptcy is a result of fraud like identity theft or common errors could make you suffer severe consequences for almost a decade.

Having a bankruptcy in your report can be an enormous brick wall that hinders you from making progress and damages your fiscal health severely.

Usually, it’s not in the interest of lenders to hide bankruptcy they would use it as a reason to reject your loan application or give you incredibly expensive interest rates.

With so many people filing for bankruptcy, consequently having bad credit scores, you might find comfort in being part of the masses, but the best thing is fixing the issue and dropping it off your account.

Also Check: Can A Person File Bankruptcy On Student Loans

Building Credit After Chapter 7 Bankruptcy

Most can rebuild their credit rating and have a better score than ever within 1 – 2 years after they file Chapter 7 bankruptcy. But, you canât take this for granted. To get the full benefit of your bankruptcy filing, youâll have to make an effort to improve your credit score.

Getting new credit after filing bankruptcy – itâs easier than you might think!

One of the biggest surprises for many bankruptcy filers is the amount of car loan and credit card offers they receive – often within a couple of weeks of filing their case. Itâs a lot! Why?

Filing Chapter 7 bankruptcy makes you a low credit risk

The Bankruptcy Code limits how often someone can file a bankruptcy. Once you get a Chapter 7 bankruptcy discharge, youâre not able to get another one for 8 years. Banks, credit card issuers and other lenders know this.

They also know that, with the possible exception of your student loans, you have no unsecured debts and no monthly debt payment obligations. This tells them that you can use all of your disposable income to make monthly payments.

Beware of high interest rates

Pay close attention to the interest rates in the new credit offers you receive. Credit card companies and car loan lenders have the upper hand here. They know you want to build your credit rating back to an excellent FICO score. And they know that youâll be willing to pay a higher interest rate than someone with perfect credit and no bankruptcy on their record.

Shop around

Dont Open New Accounts All At Once

After a bankruptcy discharge, it might surprise you that youll get a lot of credit card offers. Many of these offers are for secured credit cards with sky-high interest rates. Companies now consider you a better risk because you dont have a lot of debts anymore. However, opening multiple new accounts at once could make it difficult for you to maintain regular payments and this could harm rather than help your credit score.

Recommended Reading: Can You Rent An Apartment After Filing Bankruptcy

Buy Yourself A Present: An Authorized User Tradeline

Did you know that if you piggyback on someone elses account as an authorized user, their account history and activity can affect your credit score?

Yup, even if you never use the authorized user card, their account shows up as a tradeline on your credit report and influences your score.

Do you see the golden opportunity here?

Find someone whos very responsible with their credit card, has a large limit, and has had it opened for ages.

And then convince them to add you as an authorized user.

Its kind of a lot to ask. So, what if no one close to you fits the bill?

Theres another solution: you can buy an authorized user tradeline!

I know it sounds crazy, but hear me out.

Tradeline Supply Company is an online marketplace for buying and selling tradelines.

Quick Tip:

It can take up to 30 days before you see the tradeline hit your credit report and up to 60 days before you see its true effect.

Every tradeline you buy from Tradeline Supply Company has a perfect payment history and credit utilization of 15% or less.

The best tradelines are ones that have been opened for a long time and have a high credit limit. These have the largest impact on your score.

Moral of the story?

You can pad your credit report and boost your credit score by buying authorized user tradelines.

Remember, anything you can do to improve your credit score helps reduce the negative impact of a bankruptcy.

Can You Remove A Bankruptcy On Your Own

Like all negative item disputes, its entirely possible to complete the process on your own. However, removing a bankruptcy from your credit report early can be a lengthy and tedious process that doesnt guarantee results.

You can dispute the bankruptcy either by stating an inaccuracy of the information on your credit report or by asking the credit bureau how it verified your bankruptcy. As with any dispute, they must respond to your procedural request letter within 30 days.

In most cases, theyll say that they verified it with the courts, but this is unlikely. You must then contact the court to ask how they verified your bankruptcy.

If they respond that they never verified it, you should get that statement in writing, send it to the credit bureau, and ask them to remove the bankruptcy.

This method isnt guaranteed, but it might be worth trying. Otherwise, enlist the help of a credit repair company to navigate the process for you.

Credit repair companies are highly experienced at disputing negative items on your credit reports. They specialize in getting bankruptcies deleted from your credit report. They also work to remove other negative information included in the bankruptcy, like charge offs and collections.

Don’t Miss: How Long Does Bankruptcy Discharge Take

Review Your Credit Reports For Any Errors

Start by reviewing your credit reports and looking for ANY errors regarding your bankruptcy.

By law, you’re entitled to a free copy of your credit report once every 12 months, and you can request your free report by visiting www.annualcreditreport.com.

Once you have your credit report, check it over for accuracy.

You want to look for any type of error: a misspelling of your name, an incorrect address, the wrong account number, the wrong date, etc.

Basically, any type of technicality that you can use in order to bring on a dispute.

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.

You May Like: Is A Consumer Proposal Considered Bankruptcy

Is Your Credit Rating Really Worth Stressing About

Are you current on all your debt payments? Yes? No? Maybe?

If youâre behind on any debt payments, your credit score could probably be better. So, rather than worrying about possibly making your already bad credit worse, think about how a bankruptcy discharge could help you build credit.

So, what happens to my credit score if I file bankruptcy?

Like all negative information reported to the credit credit bureaus, filing any type of bankruptcy will have a negative impact on your credit score. Since a bankruptcy filing is public record, they will find out, even if theyâre not directly notified by the bankruptcy court.

But, unlike other things that have a negative effect on your FICO score, a bankruptcy filing is often the first step to building a good credit score.

Work With A Credit Counseling Agency

Several non-profit credit counseling organizations, like the National Foundation for Credit Counseling , can help dispute inaccurate information on your credit report. The NFCC can provide debt counseling services, help review your credit reports, work with lenders, and help create a debt management plan free of charge.

As always, be wary of predatory credit organizations or companies. Make sure to find a reputable counseling agency and keep a lookout for any red flags, like hidden fees or lack of transparency.

When looking for a credit counselor, the Federal Trade Commission advises consumers to check out each potential agency with:

• The Attorney General of your state
• Local consumer protection agencies
• The United States Trustee program

Also Check: How To Remove A Bankruptcy From Your Credit