Bankruptcy pulls your credit score down and makes many lenders reluctant to do business with you. Fortunately, it won't mar your credit forever. The law requires that a bankruptcy be taken off your credit report in seven to ten years, according to the Experian credit bureau. The time frame depends on the type and terms of your bankruptcy, but it can't affect you for more than a decade. The credit bureaus may not do a timely removal, so you can step in and force them to do it.
Step 1
Write a letter to whichever credit bureaus are still including the bankruptcy on your credit reports after the allotted reporting time has run out. Experian, Equifax and TransUnion gather and report their information separately, so the bankruptcy may only remain on one or two credit reports. Clearly state that you expect the bankruptcy to be removed because it is past the allowable reporting period. The Fair Credit Reporting Act (FCRA) requires the bureaus to remove it if your claim is correct.
Step 2
Mark your calendar for 30 days, which is the time frame allowed by the FCRA for the credit bureau to investigate and respond to your letter The clock begins ticking when it is received, so the Federal Trade Commission recommends sending your letter certified and asking for a delivery receipt. This will tell you the exact day that the 30-day period begins.
Step 3
Write another letter to the credit bureau if you do not receive a response within the designated time. Explain that you want the bankruptcy removed immediately under the terms of the FCRA and that you will file a complaint with the FTC if this is not done.
Step 4
Request a credit-report copy to make sure the credit bureau followed through with the bankruptcy removal. You can get it at no cost when you are following up on a dispute, even if you've already received your free report for the year through AnnualCreditReport.com.
Tips and Warnings
- Liz Pulliam Weston, a financial columnist for MSN Money, explains that a bankruptcy's impact will decrease as time goes by, as long as you handle your finances properly after you're done in court. You may have trouble opening new accounts or be forced to pay high interest rates in the first year or two, but prompt payments and low debt will make you more desirable over time.
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