How to Correct Mistakes On Your Credit Report

Bankruptcy Article #3

Once someone successfully completes a bankruptcy, by receiving a bankruptcy discharge, it is usually necessary to check credit reports to make sure they accurately reflect the status of each former financial obligation. It makes sense to obtain these credit reports within 3 months after receiving the bankruptcy discharge, since creditors will have had adequate time to make notations of the discharge of their particular debts on the reports.

There are three major credit reporting agencies which track your credit - Experian, Equifax, and Transunion. Whenever you seek credit after bankruptcy for a car loan, house mortgage, or other major purchase, chances are that your prospective lender will obtain a report from one of these three. The easiest way to obtain the reports is to access each agency through the internet. In the "Links" section of this website, the web addresses for each credit reporting agency can be found. At each of the credit reporting agencies websites you can find the means by which you can access your individual report.

Once you have obtained the report, study it carefully to be sure it accurately states the status of each debt. For each debt listed on your bankruptcy schedules, the report should indicate that the debt was included in your bankruptcy, that the debt was discharged, and that the current amount due is "0". This notation is critical for all debts that you did not reaffirm in a Chapter 7 case. If you reaffirmed a debt, such as a car loan where you are keeping a car, or a house mortgage where you are keeping the house, the debt should still show as due and owing on the report. In addition, for non-dischargable debts, such as student loans, child support, alimony, or fraudulent debts, the report should reflect that you owe the debts.

For discharged debts, if the report indicates that the debt is "in collection" or has been "charged off", or that a balance is still due, the report is inaccurate. These mistakes on your credit reports will make obtaining future credit difficult. Future creditors will be confused as to whether the mistakes indicate debts that somehow survived the bankruptcy discharge.

To fix the reports, you need to list the mistakes clearly for the credit reporting agency, and provide the agency with sufficient information to correct the mistakes. It is unnecessary to contact the creditors directly about the mistakes, except in the most extreme cases. If the credit reporting agency does not correct the report after you provide sufficient information, you may need to contact your attorney to determine if further steps need to be taken to clean up your report.

All the information you need to provide to the credit reporting agency should be in your possession. For Chapter 7 cases, you should send the credit reporting agencies copies of the following:

1. your bankruptcy petition;
2. your bankruptcy schedules:
3. the initial notice of meeting of creditors; and
4. your bankruptcy discharge.

For Chapter 13 cases, you should send the credit reporting agencies copies of the following:

1. your bankruptcy petition;
2. your bankruptcy schedules;
3. the initial notice of meeting of creditors,
4. your Chapter 13 Plan;
5. the Court Order confirming your Chapter 13 Plan;
6. the Chapter 13 Trustee's report showing payments you made through the plan; and
7. your bankruptcy discharge.

The credit reporting agencies should make the corrections on your report within 30 days or so and demonstrate that the corrections were made. Once your reports have been corrected, you should find it easier to obtain credit in the future. It is important to note, however, that simply because you corrected the reports once, they may not stay corrected forever.

Many creditors sell their claims and debts to others for collection and the buyers of the claims are not always advised of your bankruptcy filing (although they should be). It is prudent to check your credit reports a year or so after the initial corrections are made and every few years thereafter to be certain that mistakes on your reports do not reappear. If mistakes show up on your report again, you can use the same mechanism noted above to correct the reports. Of course, to do so, you need to keep copies of all of the above listed documents for years - don't rely on your attorney to keep them forever! If you can't find your documents, and your attorney needs to retrieve them from storage, expect a modest charge from your attorney to accomplish that task.