How to Find and Fix Common Errors on Your Credit Report

If you are having issues with debt and considering a bankruptcy filing, there is something that you can do to ensure that the process goes as smoothly as possible

Having an accurate credit report will be very important when you meet with an attorney and discuss your bankruptcy options. There are times when errors occur on one or all of your credit reports. These errors can lower your credit score and also list creditors that should have been removed. The first step to take is to obtain a free copy of your credit report from each of the 3 major reporting companies (which are Equifax, Experian, and Transunion). Go to www.annualcreditreport.com and request your (free) annual reports. Next, go through your reports very carefully to verify that the information is 100% correct. If it is not, then you can dispute the errors with the credit reporting company AND with the company that is reporting incorrect information.

There are certain credit reporting errors that are seen more often than others

Errors regarding your personal information are common. Make sure that your entire name and current home address and phone number are correct. Look at all your listed accounts to make sure that they all belong to you, not to someone else with a similar name to you. If you have ever been the victim of identity theft, make sure that there are no accounts that were opened due to fraud by this theft.

In regards to each specific account listed on your report, make sure that the balances are current and correct. Also verify that the correct credit limits are listed for credit card accounts. This makes a difference in relation to your credit score.

Account status is the next area to take a look at

There are several items to be aware of here. Make sure each debt is only listed once and that any accounts that have been closed are reported as such. If any of your closed accounts are still reported as open, be sure to dispute this. Also, check to see that if you are an authorized user of an account (and not the account owner), that this is reflected properly on your report. Dispute any error that lists you as the owner of the account if you are not.

Other common account status errors include: accounts incorrectly reported as late or delinquent; incorrect date of last payment; incorrect date opened; incorrect date of first late payment/delinquency (if applicable). One other possible error is an account that appears more than once with different creditors.

If you discover any error on any of your reports, gather any supporting documentation that proves that there is a mistake. Then contact the credit agency or agencies that have misinformation, along with contacting the creditor/bank/company that provided the misinformation. This will ensure that your credit report is fully accurate and go a long way in improving your current and future financial situation.

How is My Credit Score Affected After a Bankruptcy Filing?

Many people who file for bankruptcy already have a low credit score and/or are unable to obtain credit cards or a mortgage. With unpaid bills piling up and possible lawsuits from creditors,  a person’s credit score continues to go down as time goes on.

After filing for bankruptcy, your credit score will lower at first

It is important to know that this is not in any way a permanent situation, and your bankruptcy attorney will advise you on how best to rebuild your credit and increase your score.  Ultimately for the majority of people in a tough financial predicament, filing for bankruptcy will be the better choice than ignoring bills and missing more payments.  

A Chapter 7 bankruptcy filing will remain on your credit report for 10 years. A Chapter 13 bankruptcy filing will remain on your credit report for 7 years.

Given the fact that a credit score can go up quickly once the proper steps are taken, you can begin to rebuild and repair your credit immediately.  

Some ways to quickly and positively impact your credit (once you have filed bankruptcy) include:

  • continuing to make monthly mortgage payments on time (if a Chapter 13 was filed),
  • continuing to make all car payments on time (if you are keeping your car), and
  • paying off any credit cards in full every month (for credit cards obtained after your bankruptcy filing). 

Many credit card companies will offer credit cards to people with a bankruptcy filing because you have either reorganized your debt (Chapter 13) or had your debt discharged (Chapter 7). Therefore, you have less debt than many credit card holders. These credit card companies are more willing to take a risk on you because you have shown that you will be able to make your monthly payments.  

If you file for bankruptcy and then rebuild your credit, you will ultimately have better credit in the long term versus continuing down the path of unpaid bills and getting deeper into debt.  Mortgage lenders and credit card companies are much more willing to approve someone for a loan or a credit card if you have taken positive steps toward improving your situation in a proactive manner.

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