Guide to Surviving the Bankruptcy Process
Can I Challenge What’s In My Credit Report?
Jim Bowser | July 13, 2010
If you disagree with an item that listed in your credit report, than you have the option to dispute it at any time, according to Bowser & Associates, P.L.C.’s Jim Bowser, a bankruptcy lawyer who deals with Chapter 13 and 7 cases at his firm in Mt. Clemens, Michigan.
Before you can begin challenging an item in your credit report, you will need to find out what exactly is in there. Bowser recommends contacting one of the agencies to get a copy of a free report once a year to find out what’s contained within the report and to check for errors that could be hurting your credit.
If you order your credit report, read it, and discover that it contacts an error, then it is time to move onto the next stage in getting it corrected. Bowser recommends starting with the credit agency itself and reporting the error. “All you have to do is write the credit reporting agency, and just indicate that it is incorrect,” he says. Because there are three different credit-reporting agencies, you may need to contact each one individually if the erroneous information shows up on all three reports.
The credit-reporting agency should then send a notice to the creditor whose late charge, in this example, you are disputing, in order to seek verification that the penalty was really made in error. “They will get a copy of that, and then they can object to it, as well,” Bowser says.
Ultimately, Bowser says that the credit bureau will usually seek validation from the creditor that the charge or late penalty is indeed accurate, and once they feel that the creditor has provided sufficient evidence they will usually side with that party in most cases. Because credit-reporting agencies are private agencies—as opposed to public or government organizations—there is little recourse on the part of the individual consumer other than to begin to challenge the creditor directly.
In these cases, the only way around the case—and the only way to get the erroneous information off of the credit report—would be to sue the creditor in court. Rather than pursue Chapter 7 or Chapter 13 bankruptcy, a lawyer would instead file a civil case.
One aspect of bankruptcy law that tends to come up in these cases, however, has to do with delinquencies on the credit report. If someone cannot prove legally that the delinquencies on his credit report were put there in error, then the next option to getting those delinquencies removed would be to file for a Chapter 7 or Chapter 13 bankruptcy. A lawyer should be able to walk the client through this process quite easily, according to Bowser.
“What we find a lot of times with bankruptcy is that if people come in and their credit report really shows a lot of delinquencies, or maybe there is a judgment against them or they have a lot of outstanding debts, then their credit report will never get better,” Bowser says. The reason for this is because those delinquencies and judgments against them will remain on the credit report for years. In fact, most of these blemishes will remain on the credit report for a minimum of seven years in many cases.
On the other hand, when a person uses a lawyer to file for a Chapter 13 or Chapter 7 bankruptcy, he can expect his credit score to begin bouncing back up dramatically in a much shorter period of time. Rather than waiting seven years for a credit score to go up from a low of 400, many of the clients Bowser works with will begin seeing their credit scores rise as soon as their filings are complete. “And that is because they no longer owe any of that debt, which is a big part of the credit score,” he says.
From that point forward, Bowser recommends that his clients begin exploring other types of credit, such as secured credit cards or loans in small amounts, in order to start building their credit scores back up. Bowser has worked with clients who saw their credit scores go from the 400s all the way up to the 700 range in a short period of time once their debts were discharged through bankruptcy.
For debtors whose ultimate goal is to someday qualify for another mortgage, Bowser says that objective is attainable in a matter of just two years if the debtor works hard to build back the credit that was previously destroyed.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
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