Bankruptcy is a final resort for some people. When the debts mount up and money becomes scarce, filing for bankruptcy is a way to remove the debt. However, it has a long-lasting effect on your credit.
A Chapter 7 bankruptcy stays on record for 10 years.
If you think there has been a mistake made, you can look at having the bankruptcy removed from your credit report.
Removing a bankruptcy
Here are ways in which you can ask for the bankruptcy to be removed.
Errors with your credit report
A bankruptcy that has been legally recognized can’t be taken off your credit report. Yet if you think that there are errors in the information, you can challenge it with you your credit bureau.
You may find that the credit report identifies the wrong person. It may still have the bankruptcy still on record after the expiry date (Chapter 13 is seven years and Chapter 7 is 10 years). You identify clerical errors in which personal information was misspelled or incorrect.
You can dispute the inaccuracies by writing a Credit Dispute Letter. If the credit bureau can validate the accuracy of the information, they have to remove the bankruptcy from your record.
Ask the credit bureau how the bankruptcy was verified
You have a right to inquire how the bureaus verified the bankruptcy. Typically it is through the court.
If the bureau fails to let you know, then you can ask them to delete it from your report.
Have the court provide verification
Contact the appropriate court and find out how the bankruptcy was verified. If the court can’t provide evidence, then ask for an official letter stating so. Send this to your credit bureau and ask them to remove the bankruptcy from your credit record.
How does bankruptcy affect my credit score?
Bankruptcy should always be considered as a last resort measure. That is because it can affect your credit for up to ten years.
A bankruptcy can drop your credit score by over 100 points.
Maybe the bankruptcy was the result of something beyond your control. You are just a victim of circumstance. Yet, it leaves a mark on your record for many years. But, there are ways in which you can still obtain credit.
Getting credit after a bankruptcy
It’s not impossible to obtain credit once a bankruptcy appears on your credit report.
You can apply for a secured credit card. With these cards, you put a deposit down. Then the lenders offer you credit. Another option is to become an authorized user of a family member’s credit card.
Bankruptcies can have a devastating effect on your credit. If you think a mistake was made, you can dispute the item with your credit bureau.
You can also ask the bureau and the courts to provide information as to how they verified the bankruptcy. If they can’t do so, you can ask for it to be removed. However, a legitimate bankruptcy can stay on your report for ten years.
That doesn’t mean you can’t get credit. There are several options available that help you rebuild your credit after bankruptcy. A secured credit card is one option.