Another Chance for Bankruptcy Filers

Due to the financial crisis which resulted in a credit freeze and implementation of the $700 billion dollar bailout many Americans will feel the burden regarding their existing credit card accounts or when applying for new lines of credit or credit cards.

Well, thanks to several Americans who were fed up with the inaccuracies reported by the credit bureaus a recent court ruling which occurred due to a class action lawsuit that was filed against the 3 major credit bureaus, Experian, Equifax and TransUnion stated that Experian, Equifax and TransUnion violated the Fair Credit Reporting Act (FCRA) by failing to maintain accurate records related to Chapter 7 bankruptcies.

The court ruling required the 3 major credit bureaus, Experian, Equifax and TransUnion to change their reporting system by October 1, 2008 and remove old debts that were included in bankruptcies. This is a HUGE victory for many Americans who had low credit scores and were unable to get approved for loans or credit cards due to: old debts still being reported as open, old debt reported with balances, reported with an "active" status or as a collection account. Accounts included in a Chapter 7 bankruptcy will now be reported with a zero balance and with a closed status.

Based on the credit ruling the 3 credit bureaus will have to clean up credit files for approximately 6-10 million consumers who have filed for Chapter 7 bankruptcy.

Many consumers have been impacted because late accounts were reported to collection agencies that ignored the fact that the accounts were included in a Chapter 7 bankruptcy. As a result, the accounts are reported multiple times as delinquent. Each occurrence of the delinquent or unpaid account lowers a consumer's credit score.

Consumers who filed Chapter 7 bankruptcy that has already been discharged will have to request a new credit report after October 1, 2008 to see if their credit report has been updated by going to the annualcreditreport.com website or by calling 877-322-8228.

If you still find errors on your credit report due to a bankruptcy, file a dispute with the credit bureau reporting the inaccurate information. You can file a dispute online which is faster and usually takes 2 weeks for a response or you can file by mail which takes 30 to 45 days for a response.