In a recession, bankruptcies take a rising toll on consumer credit reports. Bankruptcies in 2009 increased by 32 percent over 2008, many due to a withering housing market, record number of foreclosures and high unemployment rates, finance expert Nicholas Storie reported in January 2010 on Credit.com. When this type of negative information goes to a consumer reporting agency, it shows up in the "public records" section of a debtor's credit report, a stain that remains for 10 long years until the record expires. If your credit report continues to indicate bankruptcy, even if it was dismissed or discharged, you can then dispute the outdated record.
Bankrupty & Your Credit Report
Step 1
Pull your credit reports 10 years after your filing date and see whether the bankruptcy is still present. You can get copies from AnnualCreditReport.Com, the authoritative site from which to receive annual credit reports (see Resources). In most cases, outdated records automatically drop off your credit report. But if the date was entered incorrectly, this can extend the time during which it's on your credit report. If you notice a bankruptcy on your credit report, compare the date it was reported to the date you filed. If there's a discrepancy, or if the date is accurate and the record should have been removed, dispute it with the agency in question.
Step 2
Put your dispute in writing. Although Experian, Equifax and TransUnion have websites on which you can file an online dispute, the Federal Trade Commission calls paper correspondence the best way to make sure that your dispute is received. Write down your name and contact information and why you feel the bankruptcy record should be removed from your credit report. In this case, you are asking the consumer-reporting agency to remove the bankruptcy because the record is more than 10 years old and should have already been removed.
Step 3
Include supporting documentation. Never send your original documentation, notes the FTC. To prove that the record of your bankruptcy is old, you may want to include duplicates of legal documents specifying your bankruptcy filing date. Also, include a copy of your credit report with the old bankruptcy record highlighted or circled. Make copies of everything you intend to send to the consumer-reporting agency so you'll have them in your own records.
Step 4
Go to the post office and send your dispute by certified mail, return receipt requested, advises the FTC. Below is the contact information for the three consumer reporting agencies as of January 2010:
Equifax
P.O. Box 105873
Atlanta, GA 30348
equifax.com
1 (800) 685-1111
Experian
P.O. Box 2104
Allen, TX 75013-2104
experian.com
1 (888) 397-3742
TransUnion
P.O. Box 1000
Chester, PA 19022
transunion.com
1 (800) 916-8800
Step 5
Wait for the consumer-reporting agency to investigate your dispute. The agency is required to verify the disputed information with the entity from which it was reported, in this case, the court. After about 30 days, the agency will tell you in writing whether the bankruptcy was removed. If changes were made to your credit report, you'll also be sent a revised copy.
Tips and Warnings
- • Your credit report can start to recover even before a bankruptcy falls off of your history, notes MSN Money financial adviser Liz Pulliam Weston, if you manage your existing credit properly. For more information, see the Resources link below.
- • According to MSN Money, a typical problem that plagues consumers who file for bankruptcy is that their outstanding debts continue to be shown as open or overdue on their credit reports when they should be described as "included in bankruptcy." If you notice this on your credit report, contact the consumer-reporting agency as described above.
Things You'll Need
- Copies of your credit reports from Experian, Equifax and TransUnion
- Copies of supporting documentation
- Computer & printer
- Mailing envelopes
- Cash to pay for certified mail service
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