Graduation from high school or college usually comes with a relief that you no longer have to struggle to “make the grade.” That bubble bursts, though, when we discover that our credit report essentially serves as a continuing report card. Once your credit GPA drops, it can be somewhat challenging to repair your credit rating. Fortunately, there are some simple strategies that can help you pull your rating back up and keep it up.
First, understand what a credit report is and how it is compiled. Many people hear the term “credit report” and assume the information in the report is limited to financial data. Credit reports are actually part of a larger category called “Consumer Reports.” Consumer reports include “information by a consumer reporting agency relating to the credit worthiness, credit standing, credit capacity, debts, character, general reputation, personal characteristics, or mode of living of a consumer that is used or expected to be used or collected, wholly or partly, as a factor in establishing the consumer’s eligibility for credit or insurance for personal, family, or household purposes, employment purposes.” A consumer report can contain information about how you pay your bills, information from a former landlord, and possibly, information about your criminal history, if you have one. A credit reporting agency is simply a messenger for someone else. Even though every financial institution relies on consumer reports, they are still the product of contributions from people, which makes them subject to human error. Inaccurate reporting has been a topic of debate in Congress for several years.
Before you review your credit history, do an inventory of your credit so that you will know what is supposed to be on your report. Have the documentation from your bankruptcy close by so you can compare what happened in bankruptcy to what the debtor is now reporting to the credit agency. You should also keep and maintain a list of all your accounts and any dispositions of those accounts. As you are reviewing your report, look for accounts that are reported multiple times. A debtor may accidentally submit your “high balance” account three times, making it appear that you were maxing out more cards that you actually were. Because we now live in an age of identity theft, also review your report for accounts that are not yours.
Once you identify errors, learn how to use your rights and remedies as a consumer. Federal and state statutes provide dispute procedures for consumers. Texas law requires a credit reporting agency to provide you a written explanation of their dispute procedures and their process for correcting a consumer file or report. Most will also provide you with a form that you can use to perfect your dispute. If you have any documentation that supports your dispute, send copies of your documentation. Do not send originals as you are not likely to get them back. Make a simple file folder for each dispute so that you can track and follow-up on the responses. The agency then has thirty days to investigate your dispute. If they determine that the information was inaccurate, they will update your credit report. Texas also requires the credit reporting agency to send revised reports to anyone that requested your credit history within the preceding six months.
If you are successful in disputing inaccurate information, don’t quit working on your credit report. Follow-up with a smaller, preferably, local credit reporting agency a few months later. The purpose of the follow-up is to make sure that your information did get updated as required by law. If you are having problems with the dispute process, don’t give up. Other options are still available to you. The Texas Attorney General has an online consumer complaint program. You can also contact a private attorney to help you file for civil remedies under the Texas or federal statutes. Your credit report is just a piece of paper, but it should still reflect the hard work that you went through to improve your financial situation through bankruptcy.