Truthful information regarding a bankruptcy will stay on your credit report for seven to 10 years, depending on the chapter of bankruptcy you filed under. However, if your report contains mistakes, discrepancies or other inaccuracies regarding your bankruptcy, you may be able to have the incorrect information removed from the credit report by filing a dispute. The Fair Credit Reporting Act provides consumers with the ability to dispute the information on their credit report to ensure it remains accurate and requires all credit reporting agencies to abide by the rules it sets forth. You can file a dispute on all credit reporting agencies’ websites, as well as by mail and by phone.
Disputing Inaccurate Personal Information
The personal information tied to the bankruptcy must be accurate. If your name, current or previous addresses or other identifying information is incorrect on your credit report, you can initiate a dispute and request that the credit agency make appropriate corrections. The credit reporting agency then has 30 days from the date they receive the dispute to acquire the correct information from the court and update your credit report. The FCRA states that after 30 days credit bureaus are legally obligated to remove the entry to which the erronuous information applies, even a bankruptcy.
However, this will not remove the "Included in bankruptcy" or "Discharged in bankruptcy" notations that accompanies the entries of creditors you included in the bankruptcy. Even if you are successful in disputing the bankruptcy off of your credit report, you will not be able to remove those notes without claiming to have never filed bankruptcy, which constitutes fraud. If the entries have actual inaccuracies, you may be able to dispute and remove them.
Disputing an Incorrect Status
Credit reporting agencies provide the status of the bankruptcy on a credit report so creditors can know exactly where you are in the bankruptcy process. When you initially file for bankruptcy, the status reads: "Filed." If you do not complete the bankruptcy process, or if the judge throws your bankruptcy claim out for fraud or other reasons, the status will read "Dismissed" but will not provide the reason. Once you fully complete the bankruptcy proceedings and your debts are cleared, the status changes to "Discharged," which tells creditors that you no longer have the previous debt liabilities.
As with incorrect personal information, if the current status of the bankruptcy is not accurate and you file a dispute, the credit bureau must investigate your claim and correct the information within 30 days. After 30 days, the credit reporting agency must remove the entry. The status of accounts you included in the bankruptcy should read "Discharged in bankruptcy" or "Included in bankruptcy." If they do not, you can dispute each entry and the same rules will apply.
Disputing Incorrect Balances
Once your bankruptcy is discharged, the balances on all the accounts you included in the bankruptcy should read “$0.” If any do not, file a dispute. The credit reporting agency will once again have 30 days to correct the information or they will be forced to delete the entry.
Improving Credit With a Bankruptcy on Your Report
If your attempts to remove the bankruptcy don't work, you can still improve your credit while you wait for it to fall off natually. Often, people who file bankruptcy are inundated with new credit offers from auto lenders and credit card companies. While these offers may seem like an easy way to quickly rebuild your credit, the fine print often contains high fees and interest rates that can easily land you back in financial trouble. These companies know you can't file bankruptcy again for seven years, giving them plenty of time to collect.
A better way to rebuild your credit after bankruptcy may be to apply for secured credit cards that require you to keep a cash deposit in an escrow-type account. This serves as collateral and your credit is limited to the amount you deposit. Store and gas cards are also good for rebuilding credit if you keep the balances low during the statement cycle and pay them off in full each month. If you have a good, long-standing relationship with your bank or credit union, you may be able to receive small unsecured loans. If you request $1,000 or less and pay it back over the course of a year, you'll give your credit history a quick boost with manageable payments.
- How to Handle Inactive Credit Card Accounts
- How to Get A-1 Credit
- How Not to Pass Bad Credit Along in a Marriage
- How to Improve a Credit Score or FICO
- How Do I Remove Derogatory Credit Remarks From a Credit Rating?
- Can You Get Credit Cards After Filing Chapter 13?
- How Often Are Credit Payoffs Reported?
- How Many Times Can You Dispute Your Credit File?