Disputing Errors on a Credit Report

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Disputing Errors on a Credit Report

Have you found an error on your credit report?  If so, follow the following steps to dispute it:

1. Request a free copy of each of your credit reports from www.annualcreditreport.com.

2. Gather information to show the error.  For example, if you filed a Chapter 7 bankruptcy and a discharged debt is being reported as being owed on your credit report, send a copy of the discharge paperwork.

3. Draft a dispute letter  to send to the credit reporting bureaus.  The Federal Trade Commission has a sample letter you can use.

4. Make copies of EVERYTHING.  Send the letter (certified, return receipt requested) to the credit bureaus reporting the error on your credit report, with the supporting documentation.  The addresses for each of the credit bureaus are:

P.O. Box 7404256
Atlanta, GA 30374-0256

Dispute Department
P.O. Box 9701
Allen, TX 75013

Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000

5. Wait at least 30 days.  Within that time, you should be contacted regarding the outcome of your dispute.  If you hear nothing, send a follow up letter.  If the error is corrected, great.  (Pull a copy of your credit report to be sure.) If you do not receive a response, even after follow up, or if the error is not corrected, you may need to escalate your approach and you may have legal remedies.  Contact Collum & Perry for assistance and we will work diligently to ensure the accuracy of your credit report.

How do I rebuild my credit after filing?

One of the biggest questions our clients ask is “How do I rebuild my credit?” While many clients also swear off ever borrowing money again, we typically suggest that clients re-enter the world of credit cautiously, but confidently. It is often necessary to borrow money (for a car, house, etc.), and using credit wisely in the present allows you to rebuild your credit and have access to loans in the future. To assist you in re-establishing credit, we have compiled the following suggestions:

  • Use the Credit Report Clean-Up Packet we will send you. You’ve just gone through a huge change, and we know it hasn’t been easy. Don’t let that go to waste! Use the packet we are sending you to ensure that your credit report is accurate.  Ensuring the correctness of a credit report is a must if you want to rebuild your credit.
  • Make a budget and stick to it! An online option is mint.com. You can also use YNAB, quickbooks, the envelope method, or any other tool to track your income and expenses.  If you want to rebuild your credit, it’s best to use solid materials and proven strategies.
Everyone struggles, but rebuild ing can create something superior.

Bankruptcy is often a last resort, but it can be a method to tear down a decaying structure and rebuild with confidence.

  • Use credit wisely. The best way to rebuild your credit is to use it. If you reaffirmed a debt in a Chapter 7 or have paid for a house through a Chapter 13, you will have some use of credit being reported. However, if you do not have personal liability on any debts after your bankruptcy, your credit report is blank, just like when you graduated high school. So, start over. You will have TONS of credit card offers. DO NOT take all of them. Take the best of them. One credit card. Use it and pay it off. Never use more than 20% of the available balance and pay it off every month. After 6 months or so, apply for another card. If your first credit card had an annual fee or was a secured credit card, close that account. After another 6 months, apply for another credit card, maybe a gas card or store credit card. Finally, after approximately 2 years, your credit score should be substantially higher than it was immediately after filing and is likely higher than it was before you filed!
  • Be aware of the credit available to you.
    • Getting a secured debt is often easier than an unsecured debt. If you don’t need a car, you may find yourself in need of a secured credit card. For this, you will need to submit a certain amount of money (often $300-$500) and your credit card will be secured by that debt. This can be an expensive option, but can be the starting line of the race to rebuild your credit. Make sure that the creditor reports to the credit bureaus!
    • You could have someone add you as an authorized user to a longstanding credit card account. Typically, you are not held responsible for the outstanding debt, there is no credit check, but the card’s payment history is reported on your credit. Do this carefully! If the person has bad credit, it won’t help you to be an authorized user. Do not use the card unless you intend to pay what you borrow.
    • You can research credit cards at nerdwallet.com.
  • READ and UNDERSTAND your obligations.  When you borrow money, you are agreeing to certain terms.  These will include fees and interest.  The best credit cards tend to charge no fees, have low interest, and offer high rewards and should be available to you after you rebuild your credit.  Ideally, when your credit is strong, you will pay off your balances every month and be able to capitalize on the benefits of credit cards.  It is highly unlikely that you will ever be able to pay off a mortgage or car loan without ever having to pay fees and/or interest.  BEFORE you obtain either type of loan, review and consider carefully how much the debt will cost you. Learn about borrowingmortgage loans, car loans, compounding, and calculate your own amortization table.  Carefully consider your options and the costs!

How to have mortgage payments reported on your credit report post Chapter 7

When you receive a discharge in a Chapter 7, all of your in personem debt is discharged, with few exceptions.  When it comes to mortgages, a debt remains: debt on the house.  What this means is that you personally are not obligated to pay for the house, but if you stop paying, the lender can collect from the house itself, via foreclosure.  This is because the lender has a Deed of Trust, creating a lien on the home.  However, payments, whether they are on time, late, missed or delinquent, should not be reported on your credit report.  This can oftentimes create a stumbling block for rebuilding credit.

One solution the bank will suggest and that you might find online is to sign a reaffirmation agreement on a home.  However, WE NEVER recommend that a client sign a reaffirmation without a compelling reason (i.e., significant reduction in principle/interest) and find that our Judges often do not permit the signing of a reaffirmation agreement.  You can read more about reaffirmation agreements here.

So, what do you do?

  • Request a payment history for the mortgage company.  Your mortgage company is provided to supply this at least once each year pursuant to NCGS 45-94(d).
  • File a dispute, in writing, with each of the three credit bureaus.  You can read more on how to do this here.
  • The credit bureau is required to verify the reported information with the mortgage lender within 30 days.
  • At that point, the mortgage company can either:
    • Do nothing, in which case the credit bureau must accept the information provided by the client OR
    • Accurately report information.  This can be difficult to explain how payments are made but not reported.
  • Repeat this as often as needed.
  • Always keep the payment history so it can be provided when applying for new credit (on a car, another house, a refinance, etc.)


How do I make the bank take back my home?

Often, clients come to our office because they have a house on which they owe more money than they can sell it for.  For example, when they bought the home, it was worth $300,000.00, and the clients obtained mortgages in the amount of $260,000.00.  After the market crash and a few missed payments, they now owe $250,000.00 but they best offer they’ve been able to get for the home is $200,000.00.  The clients cannot afford the mortgage, need to move and/or have another reason for needing the home out of their name.  But the bank won’t work with them — the bank won’t accept a short sale, the bank hasn’t foreclosed, and the bank won’t modify.  So what is a client to do?

One option is to file a bankruptcy.  If this happens, a client’s personal obligation to pay the debt can be discharged (meaning they no longer have to pay the bank).  However, as many news articles have noted, banks often don’t foreclose in a timely manner.  This leaves the client with the obligation to insure the home and pay taxes and HOA dues.  For cash-strapped clients, that can be a huge burden, especially when they do not want the home, do not live in the home, and have tried to do “the right thing.”

Now, in the Western District of North Carolina, the Bankruptcy Court has permitted a novel way to give the home back to the bank:  as a gift.  North Carolina law permits that a property owner can “gift,” via a Quit Claim Deed, real property to another.  However, the recipient has the permission to reject such a gift.  The issue is that there are no clear rules on how long a recipient has to reject the gift.  The Bankruptcy Court in the Western District of North Carolina has addressed this problem by requiring a bank to reject a Quit Claim Deed within 6 months after it has been filed.  The rejection must be filed with the Bankruptcy Court and, if it is not, the Bankruptcy Court deems the Deed accepted.  The first case of this style was In Re Rose.   This is fantastic news to many people who have struggled for years under mortgages they cannot afford, attempting to maintain property that they know is eventually going to be foreclosed.

New Collum & Perry website

Collum & Perry’s new website is complete and we invite you to browse our Areas of Practice. Under our new name we will continue to practice in the same areas of law, but our clients will find something new offered to them, and with the same personal service you have come to expect.

Be Proud of North Carolina

Collum & Perry wants you to know that you can be proud of North Carolina. Our state is one of the most protective in the country regarding you and your peace of mind. Please view our Frequently Asked Questions (FAQs) under the Creditor Harassment link on this page to learn more about your rights and what the debt collectors can and cannot do. You will be surprised.