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Michigan Bankruptcy lawyers are ready to help you file your
bankruptcy and represent you before the bankruptcy court. They are
also available to answer questions you may have about your credit
report and how it may be affected by declaring for bankruptcy.
The following provides some general information about the types
of consumer credit reports that are requested by lenders, creditors
and other companies, as well some general information on how they
are used to determine your creditworthiness and, in some cases, your
employability. If you have additional questions about how bankruptcy
can affect your credit report and ability to obtain a loan or line
of credit or if you need to file for bankruptcy, contact a
Michigan bankruptcy
lawyer now.
Credit bureaus, also known as credit reporting agencies (CRAs)
collect, package and sell information about your financial matters
to creditors, lenders and other companies seeking financial
information about you. The information the bureaus collect on you is
commonly known as your "credit report" or "credit profile," and is
generally sold to these companies at $1 to $7 per report.
While there are hundreds of credit bureaus across the nation, the
industry is dominated by three major credit bureaus:
There are many other credit bureaus, but they are generally are
affiliates of or subscribers to the major three bureaus, which is
why reports from these other bureaus are usually a compilation of
information from one or more of the major bureaus. Creditors that
provide credit history information about you and other account
holders they have also purchase credit reports from the credit
bureaus, but they will generally get a discount on each report they
buy.
There are two types of consumer credit reports: standard and
investigative. The standard report is a snapshot of your financial
history, while the investigative report is a special type of
consumer report not commonly requested or used by creditors and
lenders because they contain information obtained through interviews
with associates, friends and neighbors. The interviewer may obtain
information about your character, reputation personal
characteristics or mode of living. Investigative reports are not
obtained through the credit bureaus. However, your standard report
may be ordered through the bureaus to be included in the
investigative one. Investigative reports are generally requested by
employers who need their employees to be bondable or otherwise be
able to obtain secret, special or confidential clearances.
The standard credit report is the report that creditors and
lenders obtain to determine your creditworthiness and credit
standing for the purpose of determining the financial risk involved
with granting you a loan or other line of credit. It contains four
major parts:
- Personal Information, which includes data
such as: your full name, addresses (both current and past), date
of birth, Social Security number, employer (both current and
past), and your job title or position. If you are married, your
spouse’s personal information will also appear on your report.
- Credit Accounts, including the date each
account was opened, credit limit, payment history, balance due,
payment arrangements, whether it’s your own account or shared
with someone else (joint), and, if applicable, late payment
information and any negative actions taken (such as the account
going into collections, charge-offs, loan defaults or
foreclosures).
- Inquiries, a listing of everyone that has
viewed your credit report for the past two years.
- Public Record Information collected by
individuals who gather public record information from the
courthouse and sell it to the credit bureaus and other
interested parties. Some courts do send public records to the
credit bureaus, but most reporting is done manually. Public
record information normally includes such things as judgments,
liens and bankruptcies.
Why is my credit report so important?
Your credit report is how creditors determine your credit standing
and creditworthiness for a loan or line of credit. Your credit
report is how lenders and creditors determine not only if you get
the line of credit or loan you are applying for, but also the rate
of interest that you pay on it if you are approved. Because of this,
it is very important that you regularly review your credit report
with each of the major three agencies (at least once a year, but
preferably once every 3 months) to assure that each reflects
accurate and up-to-date information about you.
Sometimes errors can occur in reporting that may hurt your credit
score. Information can also become outdated, which can result in
negative information about you still appearing on your credit report
after it should have been removed. Negative actions such as
collections and charge-offs typically stay on your credit report for
up to 7 years and a bankruptcy remains for about 10 years. Having
outdated or inaccurate information can cause you to be denied credit
or cause you to pay much higher interest rates on any line of credit
or loan you do get.
Common examples of erroneous or otherwise inaccurate information
that could possibly appear on your credit report include: accounts
belonging to an ex-spouse or someone with a similar name or Social
Security number as yours, outdated negative actions on accounts,
outdated account information (including paid off accounts not
reflecting that they’ve been paid off), accounts fraudulently opened
in your name and unauthorized charges on your existing credit card
accounts.
What can I do if I find an error or inaccuracy on my
credit report?
Under the Fair Credit Reporting Act (FCRA), you have the right to
dispute any inaccurate and outdated information on your credit
reports, as well as any unauthorized charges on your accounts or new
accounts opened in your name without your consent. The major credit
bureaus each have a dispute policy that you can either do by mail or
online. See
Credit Repair for more information or call the credit bureaus at
the toll-free numbers listed near the top of this page.
Once you dispute the account, the credit bureau will investigate
your complaint over a 30-day period of time. If it is determined
that the information is not accurate, it will be updated or removed,
depending on what is needed to be done. No matter how the
investigation turns out, the credit bureau will notify you in
writing on the outcome of their investigation. If you are not
satisfied with the outcome, you can add your own statement about the
account. These statements are typically limited to 100 words or
less.
I’ve filed for bankruptcy, how does this affect my credit
report?
As previously stated, a bankruptcy will remain on your credit report
for about 10 years. In addition to the bankruptcy, other things may
also appear on your credit report which may not accurately reflect
your financial status as a result of the bankruptcy. It is not
uncommon for creditors to leave all the late payment and other
derogatory information on the account even though the account has
been discharged through your bankruptcy. This information can be
very damaging to you and hamper your chances of re-establishing your
credit once you are in better shape financially.
If you notice that the late information and other negative
actions (like charge-offs, collections, etc.) still appear on your
credit reports on accounts that were discharged through your
bankruptcy, you can have this negative information removed from your
credit reports and have the credit bureaus simply state "Account
included in Bankruptcy" in place of the negative and other
derogatory information. Contact the credit bureaus at the
above-listed toll-free numbers for information on how you can get
accounts discharged through your bankruptcy accurately updated.
How can I raise my credit score?
There are several ways to raise your credit score. The most obvious
way is to make sure you pay your bills on time each month. However,
if you end up in a situation where you cannot pay your bills on
time, first try contacting the creditor to see if you can work out
alternate arrangements until you can get on your feet financial.
Explain your situation to them. They may be able to work something
out and your good credit may remain intact.
If you get to where you debts are overwhelming, but you don't
want to file for bankruptcy check our
Bankruptcy Alternatives page for ideas on how to get your debts
under control and keep the damage to your credit report to a
minimum. However, there are times where there are no other
alternatives than bankruptcy. If you need to file for bankruptcy,
contact a Michigan
Bankruptcy Lawyer to discuss the best option for you.
If you have filed for bankruptcy and are interested in starting
to restore your credit, check our
Credit Restoration page for ideas on how you can start
rebuilding your credit after bankruptcy.
The Federal Trade Commission (FTC) provides a brochure about
credit repair scams in Adobe Acrobat Portable Document Format (PDF).
Click here to download it.
Contact an experienced and reputable
michigan bankruptcy
lawyer for more information on your rights under the Fair Credit
Reporting Act (FCRA) and the Consumer Credit File Rights Under State
and Federal Law. If you need to file for bankruptcy, contact
MichiganBankruptcyLawyer.com now.
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