One of the biggest concerns people have about filing for bankruptcy is the effect on their credit. Most people don’t realize it is not the bankruptcy that damages their credit, but their high debt balances and the delinquent status on accounts. However, anytime major changes have taken place regarding your debts it is important to review your credit report for accuracy. If your credit is in need of repair, there are a few ways to ensure the best result.
Legal Credit Repair
There are many companies that offer credit repair services to those who have experienced debt problems or recently completed a bankruptcy, many of which may not perform these services legally. Therefore, it is best to pursue credit repair yourself.
If your debts and account standings are accurate on your credit report, but also demonstrates a negative history, you can still improve your credit. You can appeal to your creditors directly by sending a Goodwill Letter , which explains your financial hardship or reason for your account standing. Reasons for account problems include loss of employment, unexpected medical illness and computer bill pay processing error. The letter should include why your account is delinquent and your plan to resolve the situation. Many creditors will be willing to eliminate your negative account remark for a first time offender.
If your debts and account standings are not accurate on your credit report, you can improve your credit score by disputing this information. The Fair Credit Reporting Act allows for you to contact the credit bureau as well as your creditor to prove the information is inaccurate, in hopes of having the information updated or removed. Reasons for inaccurate information include debts that were never owed, debts that did not belong to you or debts that you had owed but have since paid. It is important that you provide written proof to demonstrate the debt was not yours, never acquired or was resolved in full by the creditor.