Leaving Your Bankruptcy Behind
According to the United States Bankruptcy Court's website, the rate of bankruptcy as nearly doubled over the last ten years, with 1 in every 72.8 households declaring bankruptcy in 2003. Financial experts blame this increase on the growth of consumer debt over several years of economic recession. In other words, consumers with less money available are using credit to continue to meet their family's financial needs. Is it any wonder many consumers have found themselves drowning in debt?
Bad credit isn't just embarrassing—it's expensive
While bankruptcy can provide financial and emotional relief, its effects on credit reports can haunt consumers for up to ten years. Future creditors view questionable listings, such as bankruptcies, as signals of the borrower's inability to manage money. As many who've declared bankruptcy know, this isn't always an accurate assumption. Sickness, job loss and unexpected emergencies can take their toll on already stretched budgets and force families into bankruptcy.
Having a bankruptcy on your record can destroy your credit report. And bad credit isn't just embarrassing-it's expensive. Each year consumers with less than perfect credit are forced to pay thousands of dollars more in interest rates for such necessary purchases as cars and homes. This is particularly unfair when consumers are charged high interest rates because of incorrect information on their credit reports. According to a June 2004 study by U.S. Public Interest Research Group (U.S. PIRG), a consumer advocacy group, as many as 79 percent of credit reports have errors, 25 percent of which are serious enough to potentially result in a credit denial. More than half of the examined reports had information that was either outdated or belonged to someone else.
You, however, don't have to live with these errors. The consumer is given the explicit right to dispute illegitimate items found on a credit report under the Fair Credit Reporting Act (FCRA or 15 USC § 1681). This statute gives consumers the substantive right to dispute inaccurate, obsolete or unverifiable items on their credit reports. However, contacting all three major credit bureaus and dealing with the hassles, corporate "red tape" and follow-through involved can be frustrating and time-consuming. For many consumers, hiring an experienced
credit report repair firm is a wise solution.
As in other financial service industries, there are inexperienced and even dishonest people and companies working in the field of credit report repair. Before
choosing a credit repair expert, it is important to know who you are dealing with. Be sure to do your research before making a decision so that you can be sure you're dealing with a reputable firm.
There is a way to move past bankruptcy. Thousands of consumers have learned firsthand how legitimate credit repair firms can provide money-saving solutions to their
credit history problems. By disputing items that are inaccurate, unverifiable or misleading, legitimate credit repair firms can work to remove bankruptcies from credit reports.