This is an important one and quite honestly, I can't believe I haven't written on this topic yet. I may have, the blogs tend to run into one another as the years go by. Regardless, if a post is in fact buried down there from 2013, I think it's prudent to speak on it again.
So, you've reluctantly filed Bankruptcy. Typically, it's a Chapter 7. However, this applies also to those folks who file Chapter 13 as well.
Consider us your credit Sherpa.
To begin with, after we transition out of a bankruptcy, many times accounts that should have the language, Account included in Chapter 7, or something to that effect. However, in some cases, all the bureaus do not place nice. Take a look at the screenshot of one of our clients. Basically, you can see the language we are expecting after a Bankruptcy on Experian and on TransUnion, but our friends over at Equifax are reporting the account incorrectly. What does this mean? It means, if it is not corrected, future lenders would not be able to under write a mortgage because this tradeline is showing an outstanding debt. Additionally, this is affecting the scores by about 50 points. I know this, because once we got this account corrected, her scores went up that much on Equifax.
Unfortunately, most Attorneys won't, or can't help with this. They are attorneys, not credit repair professionals after all.
However, we can. Well, we usually can. I haven't had a problem yet getting these items corrected. It just takes a while. Why?? Because the bureaus, even though they retain information on us, they do a very poor job of it. Meanwhile, consumers suffer by paying higher interest rates. Well, suffice it to say, we got it corrected. Though it did take several rounds. Three if I recall correctly. When it was finally fixed, they simply deleted it. Meaning the whole account was wiped from her credit report. We were both satisfied with the results.
In addition to accounts reporting incorrectly, each one of those accounts that are reporting 'included in Chapter 7 Bankruptcy' are affecting the credit, as you can imagine, pretty much any language referencing "bankruptcy" is damaging to credit. So, we do our best to ensure they are reporting accurately, and if they aren't and they get removed, that increases the scores, typically. Additionally, we have to build credit, to provide some positive information to offset the negative information. This sometimes is a struggle.
In short, there is immense value in having a guide during the rebuilding of credit process. Sometimes this includes deleting items that are incorrect, or should not be reporting any longer due to the statue of limitations, sometimes it is ensuring that items that are included are in fact, reporting that way. It always includes building credit. And most importantly, it includes some encouraging words from a friend.
We've gone through this process with many of our clients. There is in fact light on the other side. Patience, perseverance and compassion, we'll get there together.
Ed-Jack Dvorak is National Affiliate Liaison at Credit Dr., a national credit restoration company. He works with clients and creditors to improve credit profiles.