Credit Repair Attorneys in Naperville
Rebuild Your Credit after Bankruptcy
Repairing your credit score after filing for bankruptcy may seem intimidating, but it can be done in as little as 18 months if you take the necessary steps and make smart financial decisions. At Lynch Law, LLC., our credit repair attorneys in Naperville are here to help you move forward after bankruptcy and regain financial stability. Let our team help you rebuild your credit as quickly as possible.
Call (630) 318-2111 for a free consultation.
Every day, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is these companies can’t deliver an improved credit report for you using the tactics they promote. No one can remove accurate negative information from your credit report. So, after you pay the company hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money.
If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or internet to apply for credit and provide false information.
Your Rights Regarding Credit Repair
No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost.
According to the Fair Credit Reporting Act (FCRA):
- You’re entitled to a free report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment.
- Each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – is required to provide you with a free copy of your credit report once every 12 months if you ask for it. The three companies have a central website, a telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to. To order, click here or call 877-322-8228.
How to Clean Up Credit Report After Bankruptcy
Your credit can take a big hit after bankruptcy—the negative mark can stay on your credit report for a while. However, it’s possible to rebuild your credit with hard work and responsible spending.
Take the following steps to clean up your credit report after filling for bankruptcy:
Keep up payments with non-bankruptcy accounts
Avoid switching jobs frequently
Apply for new credit cards
Consider getting a cosigner on your loans/rental agreements
Keep up with your payment on your new credit
Make sure your payments are being reported to the credit bureaus
Keep your balances low
Check your credit report to ensure your bankruptcy is accurately recorded
FAQs about Rebuilding Credit
Where do credit reports and credit data come from?
Credit reports are compiled by credit bureaus — private, for-profit companies that gather information about your credit history and sell it to businesses that can see your credit report, including banks, mortgage lenders, credit unions, credit card companies, department stores, insurance companies, landlords, and employers. The three major credit bureaus are Equifax, Experian, and TransUnion.
Credit bureaus get most of their data from creditors. They also search court records for lawsuits, judgments, and bankruptcy filings, as well as county records to find recorded liens (legal claims).
Credit reports include non-credit data too, such as current and former names, past and present addresses, Social Security number, employment history, and even marriages and divorces. Your report will include the names of your creditors, the type and number of each account, when each account was opened, your payment history, your credit limit or the original amount of a loan, and your current balance. If an account has been turned over to a collection agency or is in dispute, that will appear in the report as well.
What should I do if I find mistakes in my credit report?
Make a list of everything that’s incorrect or out of date in your credit report.
Examples of incorrect information include:
- Incorrect or incomplete name, address, phone number, birth date, Social Security number, or employment information
- Bankruptcies not identified by their specific chapter number
- Accounts that are not yours or lawsuits in which you were not involved
- Incorrect account histories, such as a history of late payments when you paid on time
- Any closed accounts that are listed as open — it may look as if you have too much open credit
- Any account you closed that doesn’t say “closed by consumer”
From there, complete the disputed items form provided by the credit bureau. List each incorrect or out-of-date item and explain exactly what is wrong. Once the credit bureau receives your request, it must investigate the items you dispute and contact you within 30 days.
If you are right that the information is inaccurate or incomplete, or if the creditor who provided the information can no longer verify it, the credit bureau must remove the information from your report or modify it based on the results of the investigation.
What can I do to rebuild my credit?
Start by cleaning up your credit report. Then, build credit by adding positive information to your record.
Here are some suggestions:
- If your credit report is missing accounts when you paid on time, send the credit bureaus a recent account statement and copies of canceled checks showing your payment history. Ask that these be added to your report. The credit bureau doesn’t have to add this information, but often will.
- Creditors like to see evidence of stability, so if any of the following information is not in your report, send it to the bureaus and ask that it be added: your current employment, your previous employment, your current residence, your telephone number, your date of birth, and your checking account number. Again, the credit bureau doesn’t have to add these, but often will.
- It is very important for consumers who have filed a bankruptcy petition to make all post-filing payments on time. This is the fastest and most effective way to rebuild credit. Often, your credit score will recover from the bankruptcy in as little as 18 months with regular, on-time payments.
I’ve been told that I need to use a credit card to rebuild my credit. Is this true?
Yes. Creditors like to see evidence in your credit report that you have a history of paying off credit on time. If you have a credit card, use it every month. Make small purchases and pay them off to avoid interest charges. If you don’t have a credit card, apply for one. If your application is rejected, try to find a cosigner or apply for a secured card — one issued after you deposit some money into a savings account, against which you can charge purchases.
But a word of caution: Before you apply for a credit card, get back on your feet financially. Otherwise, you’re likely to end up with high-cost credit that will put you back in the hole again.
How many credit cards should I carry?
Once you succeed in getting a credit card, you might be hungry to apply for many more cards. Not so fast. Having too much credit may have contributed to your debt problems in the first place.
Ideally, you should carry one or two bank credit cards, maybe one department store card, and one gasoline card. Creditors want to see that you can handle more than one credit account at a time. But use all of the cards only if you can pay the charges in full each month — don’t build up interest charges.
Creditors may frown on applicants who have too much open credit. Keeping many cards may mean that you’ll be turned down for other credit — perhaps credit you really need. And if your credit applications are turned down, your file will contain inquiries from the companies that rejected you. Your credit file will look like you were desperately trying to get credit, something creditors never like to see.
How long can negative information stay in my credit report?
Most negative information can appear in your credit report for seven years. This includes lawsuits, judgments against you, paid tax liens, accounts sent to collection, criminal records (except criminal convictions, which may be reported indefinitely), late payments, and overdue child support.
Some adverse information regarding certain types of student loans may be reported for more than seven years. Credit inquiries (requests by companies for a copy of your credit report) can be reported for only two years.
How long does it take to rebuild credit after Bankruptcy?
Bankruptcies can stay in your credit report forup to 10 years after the last activity (usually the date you received your discharge or the date the case was dismissed).
- Chapter 7 Bankruptcy can stay on your credit report for up to 10 years.
- Chapter 13 Bankruptcy can stay on your creditor report for up to 7 years.
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