A bankruptcy can have a devastating effect your credit score. In fact, for some lenders, a bankruptcy listing on your credit reports is the only thing they need to see in order to determine that you are completely unworthy of credit.
The scary thing is that for a surprising number of Americans, the bankruptcy listed on their credit reports simply should not be there. Read on for helpful tips to weather the post-bankruptcy storm.
So is Bankruptcy Removal Possible?
A bankruptcy listing can remain on your credit reports for up to 10 years. But remember that this period represents only the MAXIMUM (and not the minimum) time frames. In other words, the credit bureaus must automatically remove bankruptcy-related items from your credit reports once the designated time periods have passed.
Can I Challenge a Bankruptcy Listing?
You may be feeling a bit stuck when it comes to removing a bankruptcy listing. While it’s true that the maximum time frames apply, there are consumer protection rights that enable you to challenge questionable items on your credit report even when they are related to a bankruptcy proceeding:
- The maximum time frame has passed. Pursuant to the Fair Credit Reporting Act (FCRA) the credit reporting agencies are required remove bankruptcy notations from your credit report after the allotted reporting time period has expired. In that regard, it’s wise to get copies of your credit reports to ensure that your bankruptcy removal is reflected.
- You were a victim of identity theft. Here’s a nightmare scenario: you filed for bankruptcy last year after a long struggle with your finances. You were also a victim of identity theft around the same time. Some of the charges on your credit card were dismissed because they were the result of stolen identity. However, this decision was not reflected in your credit report and your credit score is suffering.
- New accounts are mistakenly marked as “included in bankruptcy”. Carefully review your credit reports to make sure that accounts not associated with your bankruptcy are not mislabeled. If the credit agencies are incorrectly reporting bankruptcy notations to any of your accounts in good standing, you have the right to challenge this reporting.
How to Move On
Bankruptcy removal can potentially be a slow process, but being proactive about the information in your credit reports is an important part of building a stronger financial future, and Lexington Law can assist.