Credit Repair: Cleaning up your credit report after a bankruptcy!
It is amazing to me how many times I have talked to customers who have had a bankruptcy say that their lawyer told them everything that was in the bankruptcy would be cleaned off their credit report. Rarely is this ever true. The best way to get all this cleaned up is through credit repair. You can go to a credit repair company or credit repair attorney who will charge you hundreds, maybe even thousands to get all this cleaned up, or you can do it on your own. Chances are, with the economy the way it is right now, you don’t want to spend hundreds and I don’t blame you! I wouldn’t want to either. And you don’t need to!
Search the web and find some letter templates. These are really easy to find. The first link that pulls up under the key word search “credit repair” is a government website that has a free template. It is a pretty decent template and it would be a good one to use. That website also gives sound advice that can easily be followed. There are many websites that offer letter templates so they are easy to find.
I look at it like this. Credit repair companies and attorneys are going to charge at a minimum $250. I have never seen one for less than that and most are charging $600 to $1200. You can do credit repair on your own for the cost of the paper, envelopes, stamps and your time. The time is usually the hardest thing to come by. If you are prudent and conservative, before you go out and spend $20,000 on a new car, you might spend $500 to get the one you have running correctly. It is the same with credit repair. Even that government website from the Google search suggests that self-help may be the best way to go. Something to keep in mind is that credit repair is not fast. Typically, it is going to take 45 – 60 days for all the responses to your letters to circulate through the system. If you wait 45 days doing it on your own, another 45 will not be that much different if you then decided to use a credit repair company. You will probably have enough success doing the repair on your own, but if you eventually decided to spend the money and work with a credit repair attorney, you will still have saved yourself a bunch of money. Many credit repair companies will charge per account that you want to dispute. If there were a couple things that you could not get fixed on your own, then you might work with a credit repair company on just those items. Of course, you can dispute the items again on your own. When you do that, make sure you include proof of your claim.
It is rare, but out of the thousands of credit reports I have seen, occasionally I have seen a customer with a bankruptcy whose credit was reporting correctly after their bankruptcy. I would say 90 – 95% of the time, people will still have balances showing up on items that they included in a bankruptcy. Of course, this hurts the overall credit profile because it looks like these items are delinquent after the bankruptcy. Delinquencies after a bankruptcy are very much to be avoided and they are looked at harshly by lending underwriters. When you send out the letters regarding these accounts, you should add verbiage that states you included the account in a bankruptcy. You should include the case number of your bankruptcy and the location of the bankruptcy court so the credit bureau and the lender can reference this information. If you are not able to do that, you will most likely still see good results, but you might have better results if you include the extra information.