Implications of bankruptcy on credit report
Filing for a bankruptcy is one of the most difficult choices that an individual can make. Hence, you must avoid this under any circumstance and resort to it only after you have exhausted all the other options. Although, a bankruptcy will remove all your debts, it will put your credit report under bankruptcy as well. This means that no financial institution will provide a loan to you.
Difficulties to procure loans
Because your entire credit report is made of bankruptcy, lenders would consider you as high-risk and will not provide any credit to you. In addition, you will be unable to procure a credit card. Therefore, what options do you have of removing the bankruptcy from the credit report? The only option available is to go through the credit bureau because a bankruptcy is filed under the court system.
Disputes under Fair Credit Reporting Act
You can dispute the bankruptcy like a credit card under the Fair Credit Reporting Act. This provides individuals the opportunity to dispute the bankruptcy and the included items. You can tell the credit bureaus to verify these or inform the items that are wrongly included in the bankruptcy. Often, there will be some items that will be removed from the report. However, do not dispute all items, as this will be considered as frivolous. You can do this either yourself or use a credit repair company to represent your case to the credit bureaus.
Identify any errors
It is important that individuals acquire a free copy of their credit reports from the credit rating agencies. You must then minutely examine the report and identify any errors that may be reported on the report. There exists a possibility of errors because the agencies are working with huge amount of data on a daily basis. In addition, mistakes can be made by humans and even the machines and therefore you must identify these.
Rectifying the errors
If you find any errors on your credit reports, it is crucial that you communicate these to the credit rating agencies. Generally, even a small error can have significant effect on your credit scores. Therefore, a small mistake rectified can work wonders for an individual who finds himself/herself in a difficult financial situation. To rectify such errors, you must procure a Request for correction form and submit it to the concerned agencies. You may be surprised to know that rectifying these errors can have a significant impact on the bankruptcy.