In most cases, you have two options for removing bankruptcies from a credit report. Your first option is the waiting game. Generally, a Chapter 7 filing stays on your record for 10 years, while a Chapter 13 filing remains on your record for seven years. Your other option is asserting that your bankruptcy case was filed incorrectly, and it should be removed from all credit reports moving forward.
Filing for bankruptcy can alleviate insurmountable debt and give you the chance to start over with a clean slate. If you hire a lawyer, they can explain how to remove types of bankruptcy from a credit report and other related procedures. You filed for bankruptcy to clear your debt. Your bankruptcy lawyer can help maximize your new start.
Your Options for Removing Bankruptcies From a Credit Report
Here’s some more information on how you could clear your credit report from anything regarding a previous bankruptcy filing:
You Could Dispute the Original Bankruptcy Filing
According to Federal Trade Commission (FTC) guidelines, you can and should challenge inaccurate information and have it removed from your credit report. There are three major credit bureaus—Equifax, Experian, and Transunion—and you will have to dispute your bankruptcy’s inaccuracies with each agency individually.
Disputes require the sending of a letter describing the erroneous information, after which the credit agency in question has 30 days to respond or remove the incorrect data. Once your dispute is filed:
- Each credit bureau must investigate your allegation.
- It must submit the results of its investigation to you in writing.
- If an agency finds an error, it should notify anyone who checked your credit for purchases in the preceding six months.
- The agency must notify anyone who checked your credit for employment reasons in the preceding two years.
You do not have to dispute inaccuracies without legal guidance and support. If you are represented by a bankruptcy lawyer, they will help you understand and navigate the bankruptcy process.
Wait for Enough Time to Pass
Routinely monitor your credit post-bankruptcy and the steps you take toward improving it. Your credit report should have the dates when each negative action was reported. If your bankruptcy was completed and added to your credit report between seven and ten years ago, you can dispute it in the same way you would dispute inaccuracies.
Your bankruptcy must be discharged before it can be eligible for removal. If you are represented by a bankruptcy attorney, they will handle this process for you. Your lawyer will have all the dated records you need to refute your bankruptcy if it does not automatically fall off your credit report at the appropriate time.
The Importance of an Accurate Credit Report
Your credit score provides a picture of your financial responsibility to various potential lenders. A good credit score can help you obtain the credit you need to purchase a home, car, and everyday goods and services. Persons and entities who may check your credit score include:
- Insurance companies
- Government agencies
- Utility companies
The higher your credit score, the more favorable your interest rates will be on fixed and revolving credit lines. Your credit report depicts your debt payment history for up to 10 years. Many lenders rely on it when making credit decisions. In some cases, your credit report can also affect your job and career choices.
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Having a Bankruptcy Filing Removed Can Increase Your Credit Score
Your credit score can affect every area of your life, very often in ways you might not expect. If you have a bankruptcy removed from your credit score, it will rebound, though it may not do so immediately.
Additional steps that can increase your credit score after filing for bankruptcy include:
- Paying your bills on time
- Negotiating debt that is in collections
- Applying for a secured credit card
- Keeping older accounts open
- Limiting new credit applications
- Making payments on time
- Applying for a credit-builder loan
- Remaining under your cards’ credit limit
- Building credit over time
You should also regularly track and monitor your credit score, avoid making inquiries that ding your credit and lower your score, and establish a workable budget and stick to it. Your budget should also limit the use of your open credit accounts whose overuse can lower your score.
What Constitutes a Good Credit Score?
A high credit score can open doors that a lower score would not. In general, credit rankings can range from a low of 300 to a high of 850. Some credit bureaus have their own way of calculating one’s credit score.
Accordingly, a score of:
- 300-579 is considered poor.
- 580-669 is considered fair.
- 670-739 is considered good.
- 740-799 is considered very good.
Your credit ranking can fluctuate often, which can make keeping up with it critical to your career and investment health.
Factors That Affect Your Credit Score and Rating
All three credit reporting agencies rely on a mix of data and information to determine your credit score. Some of the factors they consider include:
- Your payment history, which accounts for approximately 35% of your credit score.
- Your credit usage, which accounts for approximately 30% of your credit score.
- Your credit history, which accounts for approximately 15% of your credit score.
- Your credit mix, which accounts for approximately 10% of your credit score.
- Your new credit accounts, which account for approximately 10% of your score.
Check your credit score at regular intervals. Not only will you spot inaccuracies and irregularities sooner rather than later, but you can also take appropriate steps to correct them right away. If you have a lawyer, disclose any suspected errors so they can take immediate and appropriate action on your behalf.
Get Help Removing Bankruptcy From Your Credit Report
If you sought or are seeking bankruptcy protection, you need to know how it will impact your credit rating in the immediate and distant future. Our bankruptcy attorneys will provide clarity and explain how to remove bankruptcies from your credit report.
Learn more about improving your creditworthiness and working with our client-focused law firm by contacting one of our Farmer & Morris Law, PLLC team members today. We can assess your credit history, manage communications with credit bureaus, and explain your next steps.