Credit Report Disputes May Improve Your FICO Score

Credit report
Filing credit report disputes may help your score
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Your credit score is determined by an algorithm calculated on your credit report data. Each credit score calculation (and there are hundreds of them) will vary slightly. There are some specific to mortgages, some to auto loans, and others for credit cards. Credit scores can be derived from data drawn from Experian, TransUnion or Equifax, the three credit reporting bureaus. After bankruptcy, one of your priorities should be to rebuild your credit score. But if your report is riddled with errors related to accounts that fell under your bankruptcy, those need to be corrected ASAP.

Improving Your Credit Starts with Checking Your Reports

After you get your bankruptcy discharge, the next thing to do is order official copies of your credit report from all three agencies. You should check and make sure that any accounts included in your bankruptcy have a zero balance and show discharged in bankruptcy. Also, look for items that are old and should have dropped off your report already whether or not they were part of your bankruptcy. You need to go through all three credit bureau reports with a fine-toothed comb looking for errors.

The Federal Trade Commission (FTC) reported that over 20% of Americans have a material error on their credit report. A material error means it’s a big deal that could affect your score. Many people have small errors on their report from a typo in their address, the wrong job listed, etc. But the big errors are those that impact your score and can cost you the chance at better credit offers, a job, mortgage, car loan, etc. Those are “material” errors.

How to File a Dispute About Your Credit Report

There are two ways to try and clear errors from your credit report. You can appeal to the creditor that supplied the erroneous data or you can appeal to the credit bureau. Filing with the creditor can streamline the process because if they agree they’ve made an error, they should notify all three bureaus of the mistake and all three can correct it on their version of your credit transcript. This might be a good place to start, but if the creditor disagrees, you’ll have to go the other route.

Reporting to the credit bureau about the mistake takes longer because you must appeal individually to each credit bureau that has the mistake on your report. Not every creditor reports to every bureau, so the error could be on one, two or all three reports. Each credit bureau has its own process and you will have to follow their guidelines to file the dispute. To ensure success, you should include evidence to substantiate your claim.

Accounts Included in Bankruptcy Should Be Easier to Clear

If an account included in your bankruptcy is still showing open, that should be a fairly easy item to clear and you can go directly to the credit bureaus for (hopefully) faster results. Your bankruptcy petition and discharge, listing the account in question may be enough evidence to get the credit bureau to correct the item although they will loop in the creditor before changing your credit report. The creditor can file an objection to your dispute and try to fight to keep the item on your credit report.

However, in the case of a bankruptcy discharge, it’s not likely they will fight you if the account was included in your bankruptcy petition. If you owe a debt that you forgot to include in your bankruptcy petition and it was eligible for discharge, the fact that you filed Chapter 7 bankruptcy and got a discharge might be enough for them to back off and allow the entry to be corrected. You might need to get your bankruptcy attorney involved to clear up the matter.

To find out more about filing disputes to clean up your credit after bankruptcy, try Credit Score Keys.