How Do I Remove Negative Items From My Credit Report Before 7 Years
1 To help on your way to better , here are some strategies to get negative credit report information removed from your credit report.
How Can I Improve My Credit Score After Chapter 7
9 steps to rebuilding your credit after bankruptcy
How To Remove A Bankruptcy From Your Credit Report Early
By Mike Pearson
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If you’re trying to remove a bankruptcy from your credit report early, you can do so by following these five steps:
- 1Review your credit reports. Check to see if there are ANY errors on your credit report regarding the bankruptcy.
- 2File a dispute. Dispute the bankruptcy with the credit bureau while making sure NOT to admit any fault.
- 3File a verification request. If the denies your dispute, make them verify their information about your account is accurate.
- 4Send a letter to the court administrator. Follow up with the court to make sure the credit bureau actually verified your bankruptcy.
- 5Follow up with the credit bureau. Send a letter to the credit bureau saying the court was unable to verify your account records, and request another deletion.
We’ll dive into this process in much greater detail and also look into what else you can do if a bankruptcy is dragging down your credit.
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Consider Applying For A Secured Credit Card
After filing for bankruptcy, its unlikely that you will qualify for a traditional credit card. However, you may qualify for a secured credit card. A secured credit card is a credit card that requires a security depositthis deposit establishes your credit limit.
As you repay your balance, the credit card issuer usually reports your payments to the three credit bureaus. Repaying your balance on time can help you build credit. Once you cancel the card, a credit card provider typically issues you a refund for your deposit.
When shopping for secured credit cards, compare annual fees, minimum deposit amounts and interest rates to secure the best deal.
File A Verification Request
If the credit bureaus claim that your bankruptcy is accurately reported, the next step is to make them confirm where they got their information about the bankruptcy.
Under the Fair Credit Reporting Act , the credit bureaus are required to tell you the source of their information when it comes to the items on your credit report.
In your letter or communication requesting verification, ask the credit bureaus to confirm the following information:
- Name and address of the courthouse
- Phone number of the courthouse they contacted
- Name of the person who verified the disputed information
- Any documentation used to verify the dispute
Chances are, the credit bureaus will claim they verified the bankruptcy with the court.
But here’s the thing: the federal bankruptcy courts explicitly state that they “do not provide information to the credit reporting agencies.”
We will use this bit of information to our advantage!
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How Does Bankruptcy Affect Credit Score
Obviously, bankruptcies always negatively impact your credit report. How big an effect varies. Having more accounts that are included in your bankruptcy will have a bigger impact than if its just one car loan or credit card.
Your credit is rated on whats called a FICO score, which ranges from a perfect score of 850 to a low of 300 based largely on things lenders see on your credit report: your payment history, debt burden, how long youve had credit and the types of credit used. How badly bankruptcy damages your score depends on how high it was in the first place.
According to FICOs published guidelines, someone with a 680 credit score considered a good score would drop between 130 and 150 points into the poor range. Likewise, a 780 credit score would drop between 220 and 240 points, also into the poor range .
Respond To Lender Inquiries
Once you submit your preapproval application, the rest is in your lenders hands. Your lender will review your income, assets, debt and credit to see if you qualify for a mortgage. If you seem like a good candidate, your lender will send you a preapproval letter. You can use your letter to start shopping for a home.
Your lender might need to contact you to ask questions about items on your credit report. This is especially common after an adverse financial event like bankruptcy. Be honest and respond to your lenders inquiries quickly to improve your chances of approval.
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How To Build Your Credit After Filing For Bankruptcy
If you are one of those people who want to swear off credit altogether, this is actually a bad idea. You want to rebuild your credit score after bankruptcy even if you dont have any immediate plans on making big purchases. This is because when you have a good credit score, it gives you access to better deals and savings. You dont have to pay deposits or high-interest rates when getting necessary services like utilities and cell phone plans.
So, how can you rebuild credit without going under debt again? Here are some practical tips.
Can You Legally Remove Bankruptcy From A Credit Report
It depends on the situation. You can remove bankruptcy from your credit report if it is untrue, misreported, disproved, or inaccurate.
You cannot legally remove bankruptcy on your credit report just because:
- You do not want it on your record
- You have a good credit score again
- Your debts are paid off
Legally, bankruptcy will stay on your record for 10 years if you filed for Chapter 7 bankruptcy or seven years if you filed for Chapter 13 bankruptcy. After that time, it should be automatically removed.
According to the Fair Credit Reporting Act , these timelines set the maximum time for a bankruptcy filing to stay on your credit report. In some cases it may be on your for less time.
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How Does Bankruptcy Impact My Credit Report
A bankruptcy will affect your credit report in two ways.
The bankruptcy stays on seven or ten years after filing.
So the agency will typically remove the accounts the bankruptcy includes from your credit report first.
Their delinquency dates will pretty much always precede the bankruptcy filing date.
Bankruptcies will always negatively impact your credit report. However, the severity of the impact will vary case by case.
If you have several accounts included in your bankruptcy, its going to have a more significant impact than if you only have a single car loan or credit card.
Public court records are always accessible via the Public Access to Court Electronic Records system.
If you have a fraudulent bankruptcy on your record, due to identity theft or perhaps a clerical error, it shouldnt be hard to track down.
Why Credit Repair Isnt The Way To Go
Under the Fair Credit Reporting Act, a credit reporting agency has the right to report any information that is truthful and accurate. That includes the fact that you filed for bankruptcy.
If theres inaccurate information on your credit report, you can dispute those errors and demand that the credit reporting agency conduct an investigation. If the investigation reveals that youre correct then the inaccuracy should be removed from your credit report.
In the case of bankruptcy, reporting it on your credit report is accurate. Trying to remove it by saying that its inaccurate is a lie. You wouldnt be disputing an inaccuracy, youd be trying to game the system.
Thats what so many of the do try to game the system in an effort to get the credit reporting agency to remove the bankruptcy from your record by disputing over and over again.
Sometimes it works, but its not permanent. Eventually the bankruptcy will reappear on your credit record because the court record section of your credit report is updated regularly.
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Confirm Accounts Included In The Filing Are Updated
As mentioned earlier, debts discharged in bankruptcy should be updated to reflect a zero balance. This will automatically give your score a small boost because your credit utilization ratio will plummet.
So, you want to access a free copy of your credit report from AnnualCreditReport.com and confirm accounts that were included in the filing are being reported accurately. If not, file a formal dispute with the credit bureaus to have the accounts rectified.
What Happens After Bankruptcy
Its almost certainly going to be hard to get any kind of loan or credit once you have a bankruptcy on your record.
However, here are some things you can do in order to start the process of rebuilding your credit.
It wont happen overnight. Therefore, its important to understand that its going to take time.
There is an old riddle you may have heard: How do you eat an elephant? One bite at a time.
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Challenge The Fraudulent Bankruptcy With The Credit Bureaus
If you do happen to find a bogus bankruptcy on your report, you need to challenge it with each of the credit bureaus.
This can be done with a dispute letter. The letter will need to include a statement from the court of record.
You will have to contact the court and ask them for a written statement that verifies you did not have a bankruptcy on file.
If the court does have a bankruptcy on file, you will need to work with them to resolve the issue.
You may need to provide identification and other records. That way you can prove there was some kind of mix-up.
First, get everything you need from the court. Then send it with copies of your identification and of course your dispute letter via certified mail to each of the major credit bureaus.
It will usually take a few weeks for them to record the changes on your credit reports. That applies as long as everything you sent checks out.
How Does Filing For Bankruptcy Impact Your Credit Score
Bankruptcies are one of the most detrimental items that can appear on your credit report. Like judgments and tax liens, they report as a public record and tank your credit score.
If your credit profile was stellar and you had a high FICO score prior to filing for bankruptcy, you should expect a huge drop in score, according to myFICO. But if your credit was already in the trenches due to the presence of negative items on your report, you would probably only see a modest drop in score, the article adds.
The more accounts included in the bankruptcy filing, the greater the impact on your score. Why so? These accounts will report for seven years from the original date of delinquency. And the impact is the same even if they get discharged through bankruptcy.
Your credit score will start to bounce back over time, and it may not take as long as you think. This is due to the fact that discharged debts are no longer owed. This means your credit utilization ratio will now be much lower. And since amounts owed account for 30 percent of your credit score, you will start to see small increases as creditors update the balances.
But if can get the bankruptcy removed from your credit report, that means good news for your credit score much sooner than later. More on that shortly.
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Send A Dispute Letter
Send a dispute letter and ask them to correct the mistake and remove the bankruptcy.
If you cant find any inaccuracies, you might try sending them a dispute letter anyway.
Ask them to verify how the bankruptcy came to be on the report.
They will likely respond that they received the information from the court, and provide the relevant information.
You can then follow the same process with the court. The hope is that one of these steps will expose some kind of problem or technicality that occurred during the process and will ultimately be grounds for removal.
Im a firm believer in the notion that nothing is impossible.
It may be highly unlikely that youll be able to remove a legitimate bankruptcy from your credit report early, but that doesnt mean it isnt worth trying.
Its definitely a long shot. However, many people who have taken the time to go through the process have had success with removing a Chapter 7 from their credit report before the 10 years were up .
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Student Loan Delinquency Or Default
Late student loan payments can start to hurt your credit after 30 days for private student loans and 90 days for federal student loans, and those delinquencies stay on your credit report for seven years.
Federal student loans go into default if you dont make a payment for 270 days. And the government has strong debt-collection powers: It can garnish your wages, Social Security benefits or tax refunds. With private student loans, your lender can term you in default as soon as youre late, but it has to take you to court before it can force repayment.
What to do: If youve paid late but havent defaulted, consider switching to an income-driven repayment plan, putting your loan in deferment or forbearance, or asking your lender for a modified payment plan.
If youve defaulted on your federal student loans, the government offers three options: Repayment, rehabilitation and consolidation.
Apply For A New Line Of Credit
Adding a new line of credit can demonstrate that you can responsibly make on-time payments. In turn, itll help your credit score. However, when you apply for new lines of credit, the lender will do a hard pull on your credit. Every time you apply for new credit, your prospective lender accesses your credit report, says April Parks-Lewis, director of education and corporate communications at Consolidated Credit. Those inquiries can drag down your credit score.
As too many hard inquiries will ding your credit score, try to apply for credit lines you know you can qualify for. You can also apply to get prequalified, which results in a soft pull of your credit. When youre trying to build your credit after bankruptcy, here are some types of credit for you to consider:
Why this matters: A new line of credit can help you build your creditworthiness.
How to get started: Choose one of the options from above that fits your situation best and work on keeping that line of credit in good condition.
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Get A Secured Credit Card
Reducing your dependence on credit cards can be an important step toward rebuilding credit after bankruptcy. However, the strategic use of secured credit cards can also help you begin to repair your trustworthiness in the eyes of lenders.
Taking out a secured credit card requires making a refundable security deposit and then borrowing against it. While these cards tend to come with high interest rates, if they report to all three credit bureaus, theyre a great option to show responsible credit behavior until youre better qualified for a traditional card with more competitive terms.
Some secured cards even allow you to graduate to an unsecured card after consistent on-time payments. This is a benefit since you wont have to apply for a new, unsecured card when your credit improves,
Keep in mind, however, that applying for a secured card doesnt guarantee acceptance, so take time to research the providers requirements before applying. If possible, choose a provider that offers prequalification so you can see whether youre likely to qualify before agreeing to a hard credit check that can further damage your score.