The Importance of Correcting Credit Errors before Filing for Bankruptcy
Some people are shocked to learn how common it is for a credit report to contain errors.
It’s difficult enough keeping your credit in good shape and your credit report free of your financial missteps. But to think your report could include reporting errors that are incorrectly listed is very frustrating.
This is especially true if you’ve taken drastic action to clean up your credit and you were hoping to have a fresh start. An error on your credit report could derail your plans to improve your financial situation.
Why Do Credit Reporting Errors Occur?
Errors come in a variety of forms.
Some errors are related to your situation and might be related to an old account or status of a current account.
Errors might also occur because items are credited to you that aren’t really related to your purchasing history. It’s actually someone else’s credit issue that was wrongly applied to your history.
Regardless of how the error occurred it’s important to deal with them as soon as you notice them. It’s also why it’s a good idea to review your credit reports before filing for bankruptcy so you can tackle any errors before you get started on your bankruptcy journey.
What should you do if you notice an error on your credit report?
Finding Credit Report Errors
The first step to dealing with errors on your credit report is to find them. Requesting free reports from all three major credit reporting bureaus is easy and only takes a few minutes.
Keep in mind, it’s possible for an error to be on one report and not on another. This is why it’s important to request copies from all three bureaus and compare them to make sure they are all the same.
You’ll need to dispute any errors you find, but only with the credit reporting bureaus that have recorded the errors.
Disputing Credit Reporting Errors
If you find any errors you need to dispute them. Start by writing a letter to the credit bureau or bureaus explaining why the item listed is in error. Include a copy of your credit report with the item in error highlighted. You should also include any documentation that proves your dispute. For instance, if the error is a credit card you paid off include the statement from the creditor that shows a zero balance.
If you aren’t sure what to include in your dispute letter, this information from the Federal Trade Commission can help.
After making copies of everything you’re submitting, mail the information via certified mail with a request for a return receipt. This way you’ll know when they receive the dispute and be able to prove you submitted it if there is a problem in the future.
What Comes Next
It usually takes about 30 days from the time the credit bureau receives your dispute to move to the next phase. Sometimes the error is corrected without any further steps. In other cases, the credit bureau will give a creditor an opportunity to dispute your dispute. You might also be asked to submit additional information.
If you do not have success with your dispute, don’t lose hope or give up. If the error is truly an error, it needs to be fixed. You can threaten to contact the Consumer Finance Protection Bureau with your complaint. It might also be necessary to speak with an attorney about the problem, which you should mention during your initial bankruptcy consultation.
Dealing with credit report errors is usually frustrating, but most errors are fixed with relative ease. Even if it takes some work it is still possible to fix errors and you should do so before moving forward with your bankruptcy.
For more information or to discuss your credit report and how it will be dealt with in bankruptcy, contact the Law Office of Robert M. Geller at 813.254.5696.