You just finished your bankruptcy case and your lawyer tells you that your case will stay on your credit report up to 10 years. However, there are credit repair companies that ensure they will be able to erase all the negative reports and improve your credit score. How is this possible?
Letters of Dispute
The Fair Credit Reporting Act protects your right to dispute any information in your credit report that is inaccurate or incomplete. It is completely free to write a letter to the credit bureau and have them investigate incorrect information. They will review your accounts and then proceed accordingly to what they find. If the information is in fact inaccurate or incomplete, they will remove the bad marks and update your credit report.
Credit Repair Companies Tactics
The credit repair companies who claim to erase all bad marks on your credit report use the Fair Credit Reporting Act in an attempt to clear your report. They begin by writing a letter disputing your bankruptcy and then send it to each credit reporting agency. The reporting agency has 30 days to either verify the bankruptcy, or update and delete the information. If the credit agency verifies your bankruptcy, your credit report does not change. The credit repair company will send another letter of dispute in hopes that the agency will fail to verify the bankruptcy in time or will eventually just get tired of reviewing the dispute and remove it from your report.
This seems like a good process if it will clear your report, but there are many underlying problems. To begin with, you are paying a company to make fraudulent statements to the credit reporting agency. Unless the statements are true, this in itself could pose a potential problem. Also, it is not guaranteed that the credit repair agency will succeed in clearing bankruptcies and other negative remarks off of your report. If they do trick the system and your bankruptcy is cleared, it is most likely only for a very short period of time. Every 30 to 90 days, credit reporting agencies update credit reports, and it is more than likely the bankruptcy will reappear. Credit repair agencies know it is only short term and count on you to not re-check your credit report after they send you a copy of your clear report.
After bankruptcy, it is best to take the time and improve your credit score properly. There is no rush to wipe your report clean after bankruptcy because your credit score actually rises, and you are in a better position for to obtain credit than before you went through the process. Contact me today to discuss ways to rebuild your credit after bankruptcy.