How to Correct Errors on Your Credit Report after Bankruptcy

How do you deal with errors on your credit report after bankruptcy?

In a perfect world, you could ignore your credit report and everything would be correct. As long as you paid your bills on time and did what you’re supposed to do, you’d never need to worry about problems with your credit or being rejected for a loan based on bad credit.

But we’re not living in a perfect world.

In this less-than-perfect world, consumers need to keep tabs on their credit reports. Mistakes happen and unfortunately, those mistakes can cost you. Negative details on your credit report can lead to rejections of credit applications.

It can also result in higher interest rates and less-than-favorable loan terms. Errors on your credit hurt your bottom line.

And it’s up to you to monitor those errors and work to have them removed if and when they occur.

Luckily, correcting errors on your credit report usually isn’t a terrible hassle. It’s more of an annoyance, but your effort pays off because you’ll see an improvement in your credit score once you correct the errors.

How do you correct an error on your credit report?

Step 1: Submit a Dispute Claim to the Credit Bureau

The first step is to submit a dispute claim to the credit bureau. You might need to do this with one credit bureau or all of them, depending on whether the error appears on more than one of your credit reports.

You can submit your dispute online or by mail. Your dispute must include a description of the credit report and copies of any proof you have of the error. The credit bureau launches an investigation once you’ve filed the dispute, which includes allowing the creditor to prove there was no error. If they fail to prove their case, the entry is removed from your credit report.

Credit Karma provides a step-by-step guide for disputing something on your credit report.

Step 2: Dispute the Error with the Creditor

If you prefer to bypass the credit bureau or the creditor interferes with the removal of the error, you can go directly to them to deal with the issue. If you submit your dispute to the creditor in writing, they are required to conduct an investigation. Unless they can prove that you are wrong about the error, they must notify the credit bureaus of the correction.

If you notice an error appears on your report with two or more credit bureaus, you’re likely better off starting with this step and letting the creditor contact all of the credit bureaus to correct the problem.

What If the Problem Isn’t an Error?

If it turns out the negative information on your credit report isn’t an error, you might still be able to have it removed. Credit bureaus will not remove accurate, verifiable information. However, there are circumstances when you might be able to negotiate to have some of the items removed, but it’s going to cost you.

Making a “pay for delete” offer allows you to remove negative details from your credit report. To do this, you must pay the account in full. You offer to do this in exchange for the removal of the negative details. It’s not an option for everyone, but if you have a smaller balance, it’s worth considering.

Another option for removing negative information on your credit that is accurate is to make a goodwill request for deletion. This is an option when you’ve already paid off the account, so you no longer have the bargaining chip of paying the account in full because you already have a $0 balance.

To make a goodwill request for deletion, write a letter to the creditor with an explanation of your situation. It might help to explain why you were late on a payment and remind them that otherwise, your account was/is in good standing.

Creditors aren’t required to comply with this, but some are willing to change it as a gesture of goodwill that they hope will encourage you to continue doing business with them.

Does Filing for Bankruptcy Remove Negative Information from My Credit Report?

No.

Filing for bankruptcy offers many benefits, but wiping your credit report clean isn’t one of them. Your balance will be reported as $0, but creditors can still see the previous problems on your report.

Closing an account also doesn’t eliminate notes about delinquent payments. Closing an account with a past due balance doesn’t stop the account from being reported as delinquent. All it does is stop you from using the account. Open, in-good-standing accounts are the best thing to have on your credit.

Finally, paying the balance on the delinquent account doesn’t automatically remove negative information. You’ll need to make a special request for that to happen, but there is no guarantee. You will change the status of the account to “current” instead of delinquent, which helps, but the negative information is still there if someone wants to see it. Accounts turned over to collections will never show current.

If you’d like to learn more about improving your credit or you’re ready to discuss filing for bankruptcy, we can help. Contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a free consultation.