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03 Jun 2013

Need to Clean Up Your Credit Report? Follow These Steps

Few people can say they've never had an issue with their credit report, even if it was not their fault; but bankruptcy brings a whole new set of issues to your standing with the credit bureaus. Whether you filed a few weeks ago or a few years ago, it will be challenging to recover a stellar credit score for at least seven years. But what about the millions of Americans who were impacted by the financial fallout of a foreclosure, job loss, or divorce? Is there something that can be done to keep a decent credit report, even right after a fiscal disaster?


According to a recent article that appeared on MSN Money, "7 Steps to Clean Up Your Credit Report," the best way to stay on top of your credit is to look at your credit report regularly. It's not uncommon to find errors that can be fixed.

A good way to keep up with your credit report is to look at it whenever you do any major reorganizing in your house. When you start tidying up the garage or the linen closet, don't forget to fix the foundation of your credit worthiness. A credit report is more than just a record of how fast you pay bills; it also represents your financial stability. It controls everything from the interest rate you pay on a loan (and whether you can get one!) to your insurance rates and career eligibility.

The biggest mistake most Americans make is to only look at a credit report when it's time to refinance, buy a car, or make another big purchase. According to a study by the U.S. Public Interest Group, nearly 80 percent of all surveyed reports had incorrect information. Knowing that inaccuracies take time to clear up, this could be a problem if you're up against a deadline to secure a loan. Regardless of your credit history it is always better to check your credit reports periodically so you can catch any issues immediately.

MSN Money has developed a quiz to help individuals get an estimated credit score, but the best way to find out is to order a credit report.  You can also get a credit report by visiting AnnualCreditReport.com. The three major credit reporting agencies are Equifax, Experian, and TransUnion.

If you're striving for perfect credit score, MSN Money recommends you take these steps:

1. Order a copy of your credit report: If you have been wondering about your credit status, why not order a report and find out what it is? Federal law entitles you to a free report every 12 months from each of the three major credit bureaus: Experian, Trans Union and Equifax. If you want to check your credit more than once per year, order one at a time and space out your requests throughout the year. Find out how to fix any problems with your credit by visiting Bankrate.com and viewing their Credit Repair for Dummies." Keep in mind if you are turned down for credit or for a job you have the legal right to see your credit report at no charge.

2. Start with the basics: When checking your credit report, be sure the basic information is correct first, including name, address, Social Security number, etc. If you find small discrepancies, they are unlikely to affect your score, but be sure to straighten out any serious inaccuracies, such as an incorrect Social Security number. Then check to make sure all the accounts listed on the report are actually yours.

3. Contact the credit bureau with any issues: According to the MSN article, "...if you see any negative information like a collection account that you don't think belongs there, it could be somebody else's account that got into your report by mistake, or something you forgot about." Make sure you take care of any major discrepancies immediately. Another red flag might be an account that shows a higher balance that what you typically carry, which could be a sign of identity theft.

Whether you have already filed for bankruptcy in Colorado or you are simply considering it, remember that most negative information remains on your record for at least seven years, and Chapter 7 bankruptcies stay on your credit report for ten years. If you are concerned about how financial issues may affect your credit status, consider your alternatives before filing for bankruptcy.

Stephen H. Swift

Managing Attorney
Law Office of Stephen H. Swift, P.C.

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