Surviving and Thriving After Bankruptcy: Credit Reports

Review credit report after bankruptcy discharge
Review your credit report after your bankruptcy discharge. Getty Images

Credit reports are another issue that people often face after filing bankruptcy. Many people have questions about how information on the bankruptcy and other negative items are supposed to appear on the credit report.  

It’s important to understand, however, that no legitimate credit repair company can guarantee that they can remove any bankruptcy related negative information permanently. Unless the information is patently false, it can be reported.

The fact that you filed bankruptcy is correct information that can be reported.  

For more on credit repair see Debt Relief Scams

How to Obtain a Free Copy of Your Credit Report

The three major credit reporting agencies, Experian, TransUnion and Equifax, maintain a joint website through which you can obtain a free credit report every year. This website is called AnnualCreditReport.com.

Do not confuse this with other sites that claim they provide free credit reports. Those sites offer credit reports as a bonus for signing up for services that will cost you money, like fraud detection and identity theft protection.

At AnnualCreditReport.com you can get reports that cover information provided by all three agencies. Not every creditor reports to every agency. Therefore, the information may not be the same for each one. That's why it's important to get a report that covers all three.

How Will the Bankruptcy Appear on the Credit Report?

The bankruptcy itself will be reported in a section near the beginning of the report entitled Public Records. It is important that this information be accurate, especially with respect to dates, so that the information will be removed promptly after the deadline for removing it (see below).

Individual creditors should also indicate if their debts were affected by the bankruptcy.

The debt should be listed with a $0 balance and marked “included in bankruptcy” or words to that effect. It is not correct for the debt to be listed as “currently owed or active”, “late”, “delinquent”, “outstanding”, “charged off”, “balance due”, or converted to a another type of debt or re-aged.

How Long Will the Credit Report Contain Bankruptcy Information?

Usually, one of the first items on anyone’s after-bankruptcy agenda will be finding out how long a bankruptcy case will appear on their credit report. It is true that filing a bankruptcy case will remain on your credit record for some time, but it will not be there forever. A Chapter 7 case will stay on your credit report for ten years, and a Chapter 13 case will stay on your credit report for seven years from the time it’s filed.

As for bankruptcy references under individual trade lines or accounts, that information will be removed after seven years.

That feels like a long time, doesn’t it? It is, but that doesn’t mean that the fact that you filed bankruptcy will continue to have an impact on your ability to get affordable credit for years to come. The more time that passes, the less that bankruptcy will affect your score or a lender’s decision whether or not to loan you money or how much to charge for it.

Getting Erroneous Credit Report Information Corrected

We advise our clients to pull their credit reports about 90 days after discharge. That should have given creditors ample time to update their reports with all three credit reporting agencies. If you find errors on your credit report, each credit reporting agency has an online process for disputing those errors. There is a problem with using that process, though. You are required to agree to certain terms, and one of those terms may be that you will agree to binding arbitration instead of filing a lawsuit against the credit reporting agency or creditor.

Here's an article from the Federal Trade commission detailing the best way to dispute errors on your credit reports: Disputing Errors on Credit Reports. If you try, but fail to get the issue corrected, contact your attorney.

She should be able to advise you on your rights under the Fair Credit Reporting Act to sue the credit reporting agency and the furnisher of the information to get the matter corrected and pay you damages if appropriate.  

For more articles in the series, see

Surviving and Thriving After Bankruptcy: Introduction

Surviving and Thriving After Bankruptcy: Dealing WIth Emotions, Part 1

Surviving and Thriving After Bankruptcy: Dealing With Emotions, Part 2

Surviving and Thriving After Bankruptcy: Ongoing Obligations

Surviving and Thriving After Bankruptcy: Taking Stock of the Future

Surviving and Thriving After Bankruptcy: Getting New Credit

Surviving and Thriving After Bankruptcy: Credit Reports