study citing that one in four American consumers have errors on their credit reports. In some cases, these errors are serious enough to cause higher interest rates for auto loans, insurance, and other credit products.
Most people examine their credit reports when preparing for bankruptcy. Credit reports issued by Trans Union, Experian, or Equifax offer a wealth of useful information, like creditor names, addresses, account numbers, and amounts. However, few see the need to review their credit reports after bankruptcy.
One common misconception is that the bankruptcy court will report to the credit bureaus. It does not. It is your responsibility to ensure that the information in your credit report is accurate. Discharged debts should be listed as “included in bankruptcy,” with a balance of “zero.” There should be no collection activity listed on your credit report after the filing date of your bankruptcy case. For instance, the addition of a third party collector after the date you filed bankruptcy violates the bankruptcy automatic stay injunction and should be removed from your credit report. Likewise, overdue payments after the filing date are considered collection actions and should be removed.
Cleaning up your credit report is the first step to credit recovery after a bankruptcy case. In many cases, a person can improve his credit score to an average score within a year or two after bankruptcy. However, any stumble along the way will only magnify the bankruptcy filing and keep your credit score low. For this reason, it is important to monitor your credit report for errors or any changes at least twice a year.
The federal law mandates that each credit reporting agency must issue a free credit report to a person once a year upon request. To facilitate this directive, the three major credit bureaus have created a consumer website: https://www.annualcreditreport.com. At this cite you can obtain an entirely free credit report without a credit card or on-going financial obligation. A copy of your credit bureau credit score is also available for a nominal fee.
Checking your credit report for errors after bankruptcy is the first step to recovering from bankruptcy. Equally important is continuing to monitor your report as you rebuild your credit. With patience and vigilance, the recovery process can be surprisingly quick. Many bankruptcy debtors are able to obtain car or home loans at average interest rates just a few years after filing bankruptcy.
If you are considering filing for bankruptcy or have any questions, the experienced bankruptcy attorneys at Fears Nachawati Law Firm can provide the legal guidance and advice you need to make a fresh start financially. For a free consultation, contact the attorneys here or by calling the office at 1.866.705.7584.