Removing a bankruptcy from your credit report is not easy because it is a public record. The good news is most public records are no longer able to be reported on your credit report. The only public record that can be reported at this time is a bankruptcy.
Getting a bankruptcy removed from your credit report can be difficult but there are circumstances where it can happen. You will need to prove that the information being reported is inaccurate. Or at least that the information has been verified. Even if the bankruptcy itself is 100% accurate, which is unlikely, who is the party reporting that bankruptcy to the credit bureaus? This information may be what helps you to get the bankruptcy removed.
You need to know where the bankruptcy information is coming from when it is being reported to the credit bureaus if you want it removed before the 7 or 10 years mark. The courthouses are not the ones reporting it the bureaus.
This can be a difficult task so you may want to consider hiring a professional Credit Repair Company. We recommend Credit Saint for this type of dispute due to the difficult nature of the situation.
What Is A Public Record?
A public record is a document that is recorded at a courthouse and it is available for public viewing. Not all public records affect your credit report from the “Big Three” credit reporting bureaus.
For example, a property deed, divorce decree and marriage certificates are public records. But they would not be found on your credit report.
A public record is on file with a local, county, state, or Federal court. In previous years, getting a derogatory public record on your credit report would be devastating to your credit score.
In recent years the rules have changed in the consumer’s favor. You will no longer see judgments and liens on your credit report. At least from the “Big Three” credit reporting agencies.
You can thank the Fair Credit Reporting Act (FCRA), which is the federal law that sets rules about the information allowed on your credit reports. Recently, the FCRA set time limits or expiration dates for judgments and liens on your credit report.
In general, most negative information isn’t allowed to stay on your credit reports forever.
This does not mean that you can still go out and buy a house if you have judgments and liens. It only means that they will be removed from your credit report. Lenders have other ways to get this information.
What Public Records Can Affect My Ability To Obtain Credit?
These are the public records you should be concerned with for the purposes of defining a public record when purchasing a home or obtaining credit.
- Bankruptcy
- Tax Liens
- Judgments
- Foreclosures
- Repossessions
Tax liens and judgments used to seriously affect your ability to obtain credit, but thankfully, the Consumer Financial Protection Bureau has decided to remove all tax liens and judgments from the “Big Three” credit reports, which will raise some people’s credit scores. But if a lender wants to know that information it can still be found.
You need to realize that just because a public record is not on your credit report, it does not mean that creditors can not find it on an alternative credit reporting system like LexisNexis and other third-party reporting agencies.
Why Creditors Still Want To Know About Judgments
Public records are a huge red flag to creditors because they are usually larger, more serious delinquent debts. The likelihood of a creditor getting a judgment on a small credit card default is rare just because of the cost involved in getting the judgment. Judgments are reserved for more serious debts.
However, if you owe $10k to the IRS or any creditor for that matter, you can be sure it is worth their while to get a judgment.
The judgment or lien should expire in ten years but there are exceptions. The creditor can refile the lien in some cases.
I had a customer with an IRS tax lien who was anxiously waiting to see if the IRS would come to refile his lien before the 10 year period expired. In many cases, they do not refile, but I am sure it depends on the severity of the situation. The point is they CAN do it. So there is no guarantee after a judgment or lien is filed that it will just disappear after 10 years.
For the purposes of this article, we will focus on public records that are only reported on your credit report, which is bankruptcy, and how to remove said bankruptcy from your credit.
How Long Does A Bankruptcy Stay On Your Credit Report
A bankruptcy will be automatically deleted from your credit report in either 7 or 10 years from the bankruptcy filing date, depending on what chapter you file. Chapter 7 is 10 years because you did not have to repay any of the debt. Chapter 13 is 7 years because you paid back some of the debt so there is less of a hit.
How Does Bankruptcy Affect Your Credit?
If a bankruptcy filing is added to your credit report chances are it will significantly drop your credit score. This is probably one of the most damaging entries because it means you are claiming you are insolvent. Your debts outweigh your means to pay for them and you are asking for the court to protect you from your creditors. It is considered a severe entry on your credit report.
It can be a double whammy too since the creditor is reporting the delinquency which is most likely the case unless you are filing due to a lawsuit. You are being affected negatively by the creditor twice.
How Do I Remove A Bankruptcy From My Credit Report?
Removing bankruptcy can be difficult but it can be done. Keep in mind that this may or may not work depending on the particulars of your situation.
- Look for any errors in the public record.
- Dispute the errors with the credit bureaus reporting the information and send a Procedural Letter Request asking them to prove how the Bankruptcy was verified.
- Once the credit bureau tells you how the bankruptcy was verified you will now confirm with that source, usually the bankruptcy court, that it was verified.
- You will want to get a letter from the “source” if the bankruptcy was in fact verified. If you are making a request for a letter then send a self-addressed prepaid envelope.
- Depending on what the source is once you have the letter from them stating the case was never verified then you send that letter to the credit bureaus and demand that the bankruptcy is removed.
Credit agencies do not call bankruptcy courthouses to verify your debt. This is what opens the door to start your dispute as a consumer with FCRA rights as your defense.
The bankruptcy court states right on their website that they do not verify or report bankruptcy information to the credit reporting bureaus and that they can not change your credit report.
It may take 60-120 days to succeed if you do. We have to keep in mind every creditor added to your bankruptcy is indicated individually on the credit report. The debt listed under the bankruptcy will show the $0 owed versus the balances originally owed.
Sometimes the process to handle more complicated credit issues can be overwhelming. Having a professional Credit Repair company handle these matters may be best as it can take a lot of time when you are starting from scratch.
Is It Easy To Have A Public Record Removed From Your Credit Report?
You can basically use the same procedure for a public record that we demonstrated with the bankruptcy. Asking the credit reporting bureau to verify the public record and then confirming with the court that it was never verified is the best way to handle these.
The three major consumer credit bureaus are taking steps to eliminate mistakes in your credit reports, but that doesn’t mean a negative public record will be automatically removed from your reports.
It may be a while before those public records fall off your credit reports, so in the meantime, you can focus on rebuilding your credit. Start by making on-time payments and maintaining low balances. If you can, pay your credit card balance in full and on time each month.
Pin it for later!
