After bankruptcy, your creditors have certain obligations with respect to your credit report. If it’s not accurate, your fresh start is jeopardized.
One of the things you look forward to after bankruptcy is the proverbial fresh start. It’s your chance to tell the world that you’re debt-free and ready to begin again.
As I tell my clients, however, the discharge is only as good as the voice it carries. If your existing and potential creditors don’t know you’re out of debt, it doesn’t do you much good.
Your credit report is, to a large extent, the only way a potential creditor knows about your financial situation. If it’s filled with errors, your financial situation isn’t being represented properly.
It’s one of the reasons why I work so hard with my clients to clear their credit report after bankruptcy. But one thing you need to know is that nobody can correct the truth.
Shirley Grantham Wanted A Fresh Start
After her discharge, she noticed that her Experian credit report showed one of her accounts as being delinquent while the bankruptcy case was going on. She sent a dispute letter to Experian demanding that they correct the error.
Experian (Sort Of) Corrected The Credit Report
In response to her dispute, Experian corrected Ms. Grantham’s credit report to show that the offending account was “Discharged through Bankruptcy Chapter 7,” and “Debt included in Chapter 7 Bankruptcy.” This is the proper way for a debt to be listed on a credit report after bankruptcy.
The problem was that the Experian credit report continued to show that Bank of America reported the account as 30 days late in November 2010 and reported the account as “charged-off” as of December 2010. This, while also showing a balance due of $0 for those months.
Ms. Grantham, faced with no resolution on her own, went to court and sued Experian.
Inconsistencies And Inaccuracies
Experian claimed that the $0 due notation was a good thing, so Ms. Grantham should be happy – in spite of the fact that the account was shown as being delinquent for those months. Experian tried to toss the case out of court, forgetting that the whole point of the Fair Credit Reporting Act is to ensure that a credit report is fair and accurate.
Of course, Mr. Grantham thought otherwise. In fact, how could an account be delinquent when the balance due was $0? It’s like having a traffic light with both the red and green lit up at the same time – it’s confusing and can’t be right.
Those inaccuracies and inconsistencies were troubling to the court, which gave Ms. Grantham the go-ahead to keep her case alive.
Review Your Post-Bankruptcy Credit Report With A Sharp Eye
It’s no easy task to read a credit report, especially the one you get after bankruptcy. Chances are pretty good that your financials were a mess before your case was filed, which leads to reports that are even more difficult that would otherwise be the case.
Nonetheless, it’s important to spend the time reviewing and understanding your credit reports. Correcting errors and ironing out the rough spots will maximize the value of your fresh start – and keep you on the road to a strong financial future.