Although
bankruptcy can and will deal a
devastating hit on your credit
profile, its effects don't have to
be long-lasting. While the
bankruptcy can legally remain on
your credit report for up to ten
years, you can begin rebuilding your
credit rating the day that your case
closes. We offer some tips.
After you get a discharge, you
may receive many solicitations from
lenders offering to finance homes,
vehicles, and credit cards.
DISCLAIMER:
The
information contained herein is
intended for informational purposes
only. It is not meant as a
substitute for specific legal advice
relating to "repairing" or
"rebuilding" your credit.
Your credit report contains
information about where you work and
live and how you pay your bills. It
also may show whether you've been
sued or arrested or have filed for
bankruptcy. Companies called
consumer reporting agencies (CRAs)
or credit bureaus, compile and sell
your credit report to businesses.
Because businesses use this
information to evaluate your
applications for credit, insurance,
employment, and other purposes
allowed by the Fair Credit Reporting
Act (FCRA), it's important that the
information in your credit report is
complete and accurate.
Some
financial advisors suggest that you
periodically review your credit
report for inaccuracies or
omissions. This could be especially
important if you're considering
making a major purchase, such as
buying a home. Checking in advance
on the accuracy of information in
your credit report could speed the
credit-granting process.
If you've been denied
credit, insurance, or employment
because of information supplied by a
CRA, the FCRA says the company you
applied to must give you the CRA's
name, address, and telephone number.
If you contact the agency for a copy
of your credit report within 60 days
of receiving a denial notice, the
report is free. In addition, you're
entitled to one free copy of your
credit report a year if you certify
in writing that (1) you're
unemployed and plan to look for a
job within 60 days, (2) you're on
welfare, or (3) your credit report
is inaccurate because of fraud.
Otherwise, a CRA may charge you up
to $9.00 for a copy of your report.
If you simply want a copy of
your credit report, call the CRAs
listed in the Yellow Pages under
"credit" or "credit rating and
reporting." Call each credit bureau
listed since more than one agency
may have a file on you, some with
different information. The three
major national credit bureaus are:
- Equifax
P.O. Box 740241, Atlanta, GA
30374-0241; (800) 685-1111. -
Experian
P.O. Box 2002, Allen, TX 75013;
(888) EXPERIAN (397-3742). -
Trans Union
P.O. Box 1000,
Chester, PA 19022; (800) 916-8800.
Under the
FCRA, both the CRA and the
organization that provided the
information to the CRA, such as a
bank or credit card company, have
responsibilities for correcting
inaccurate or incomplete information
in your credit report. To protect
all your rights under the law,
contact both the agency and the
information provider.
First,
tell the CRA in writing what
information you believe is
inaccurate. Include copies (NOT
originals) of documents that support
your position. In addition to
providing your complete name and
address, your letter should clearly
identify each item in your credit
report you dispute, state the facts
and explain why you dispute the
information, and request deletion or
correction. You may want to enclose
a copy of your credit report with
the items in question circled (See sample letter below).
Send your letter by certified mail,
return receipt requested, so you can
document what the CRA received. Keep
copies of your dispute letter and
enclosures.
CRAs must
reinvestigate the items in
question--usually within 30
days--unless they consider your
dispute frivolous. They also must
forward all relevant data you
provide about the dispute to the
information provider. After the
information provider receives notice
of a dispute from the CRA, it must
investigate, review all relevant
information provided by the CRA, and
report the results to the CRA. If
the information provider finds the
disputed information to be
inaccurate, it must notify all
nationwide CRAs so they can correct
this information in your file.
Disputed information that cannot be
verified must be deleted from your
file.
If your report contains
erroneous information, the CRA must
correct it. If an item is
incomplete, the CRA must complete
it. For example, if your file showed
that you were late making payments,
but failed to show that you were no
longer delinquent, the CRA must show
that you're current. If your file
shows an account that belongs only
to another person, the CRA must
delete it.
When the
reinvestigation is complete, the CRA
must give you the written results
and a free copy of your report if
the dispute results in a change. If
an item is changed or removed, the
CRA cannot put the disputed
information back in your file unless
the information provider verifies
its accuracy and completeness, and
the CRA gives you a written notice
that includes the name, address, and
phone number of the provider.
Also, if you request, the CRA
must send notices of corrections to
anyone who received your report in
the past six months. Job applicants
can have a corrected copy of their
report sent to anyone who received a
copy during the past two years for
employment purposes. If a
reinvestigation does not resolve
your dispute, ask the CRA to include
your statement of the dispute in
your file and in future reports.
Second, in addition to writing
to the CRA, tell the creditor or
other information provider in
writing that you dispute an item.
Again, include copies (NOT
originals) of documents that support
your position. Many providers
specify an address for disputes. If
the provider then reports the item
to any CRA, it must include a notice
of your dispute. In addition, if you
are correct-that is, if the disputed
information is not accurate-the
information provider may not use it
again.
When negative
information in your report is
accurate, only the passage of time
can assure its removal. Accurate
negative information can generally
stay on your report for 7 years.
There are certain exceptions:
Information about criminal
convictions may be reported without
any time limitation. Bankruptcy
information may be reported for 10
years. Credit information reported
in response to an application for a
job with a salary of more than
$75,000 has no time limit. Credit
information reported because of an
application for more than $150,000
worth of credit or life insurance
has no time limit. Information about
a lawsuit or an unpaid judgment
against you can be reported for
seven years or until the statute of
limitations runs out, whichever is
longer.
Your credit file may not reflect
all your credit accounts. Although
most national department store and
all-purpose bank credit card
accounts will be included in your
file, not all creditors supply
information to CRAs: some travel,
entertainment, gasoline card
companies, local retailers, and
credit unions are among those
creditors that don't. If you've been
told you were denied credit because
of an "insufficient credit file" or
"no credit file" and you have
accounts with creditors that don't
appear in your credit file, ask the
CRA to add this information to
future reports. Although they are
not required to do so, many CRAs
will add verifiable accounts for a
fee. You should, however, understand
that if these creditors do not
report to the CRA on a regular
basis, these added items will not be
updated in your file.
Date Your Name Your Address
Your City, State, Zip Code
Complaint Department Name of
Credit Reporting Agency Address
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the
following information in my file.
The items I dispute are also
encircled on the attached copy of
the report I received. (Identify
item(s) disputed by name of source,
such as creditors or tax court, and
identify type of item, such as
credit account, judgment, etc.)
This item is (inaccurate or
incomplete) because (describe what
is inaccurate or incomplete and
why). I am requesting that the item
be deleted (or request another
specific change) to correct the
information.
Enclosed are copies of (use this
sentence if applicable and describe
any enclosed documentation, such as
payment records, court documents)
supporting my position. Please
reinvestigate this (these) matter(s)
and (delete or correct) the disputed
item(s) as soon as possible.
*This letter and
information contained herein were
taken from the Federal Trade
Commissions website at www.ftc.gov
and is intended for informational
purposes only. It is not meant as a
substitute for specific legal advice
relating to "repairing" or
"rebuilding" your credit.
