First of all, you will need to pull your credit reports (again) from all three credit bureaus- TransUnion, Equifax, and Experian.  You do qualify by law to obtain a credit report from each bureau every 12 months through AnnualCreditReport.com. If you have used your free reports to file the bankruptcy, you may have a few months before you can obtain another one, or you may want to pay for a service that offers all three of your credit reports and at least one of your credit scores. Those services are not free, but they are beneficial if you’re working to raise your scores. At this time we recommend either FreeCreditScore.com or TrueCredit (TransUnion’s monitoring service).

Otherwise, there are instances where you will qualify for an additional  free credit report. If you have been denied credit for a loan or credit card because of your credit report, or if you have been denied employment because of your credit report, you qualify for a free copy of your credit report. Additional cases include being unemployed and looking for work, receiving public assistance, or if you believe there are errors from fraudulent activity or identity theft on your credit report.

Once you have your credit reports, go through each account and make sure everything is reported correctly. 30-90% of all credit reports contain some form of error, and if you have filed bankruptcy there’s a good chance one or more errors are on your credit reports.

All accounts included in your bankruptcy must be noted as Included in Bankruptcy with a $0 balance. Make sure all other accounts on your reports are actually your accounts with the proper amounts listed and that all of your information is correct on the report. If you find any inaccuracies, you will need to dispute them with the credit bureau.

There are a couple ways to dispute. If you want, you can dispute with a click of the mouse online. You can also dispute through mail. If you choose to mail your dispute, you will need to send a letter to the bureaus with the inaccuracy along with any supporting information such as statements or receipts. If the account is just not listed as Included in Bankruptcy or with a zero balance, you should attach a copy of the bankruptcy discharge. It is also recommended when mailing disputes to send them certified mail, return receipt requested.

The credit bureau must investigate the disputed information within 30 days. If they find that the information is incorrect on your credit report, they must correct it or remove the inaccuracy, and send you a copy of the corrected credit report. If you request it, they must also send a copy of the report to anyone who has requested it in the past 6 months, and to anyone who has requested it for employment within the last 2 years.

The next step in repairing your credit after a bankruptcy is by acquiring some form of credit. Since you will probably not qualify for many credit cards or loans after filing, you may want to consider a secured credit card. This will give you an opportunity to rebuild your credit, have a credit card for those times that you have to have a credit card (renting cars, reserving rooms, etc.), establish a positive credit history and getting used to managing your credit responsibly.

Secured credit cards typically match an amount that you send in as your credit limit, while holding your money as kind of a security deposit. There are a number of secured credit cards that report to the credit bureaus (which is important in repairing your credit) and are available for low or no fees. There are also prepaid cards that require you to actually use your own money. The problem with prepaid cards though is that they don’t always report to the credit bureaus and include many fees just to carry them.

It does take a bit of time, this is no overnight ordeal. Remember that your credit problems didn’t happen overnight and neither will repairing them. Once you get started repairing your credit, you’ll find it isn’t nearly as difficult as it may have seemed.

We are also aware of all of the crappy credit cards that are out there specifically for people with bad credit and those that have filed bankruptcy.  Fortunately, there is an area between crappy credit cards and credit cards that hate us. In my opinion, these cards are reputable credit card companies or banks, with somewhat higher APRs (which we understand), credit limits that are large enough to allow us to build and repair our credit but small enough to keep us from getting into mischief, and very minimal fees if any.

The most forgiving credit cards for me, have been the following:

Hooters MasterCard- this card has a high interest rate but no annual fee or other fees. It also has a rewards program, which is not typical of cards that are offered to post bankruptcy filers. As I have mentioned before, Hooters (Merrick Bank) is known for giving consumers that have filed bankruptcy higher than normal credit limits. I was approved for this card a year after discharge with a credit limit of $3250.00.

Household Bank and HSBC- I was approved for a Household Bank credit card a year after bankruptcy as well as the Best Buy Rewards Zone MasterCard by HSBC. HSBC is also the provider of the Orchard Bank credit cards, which are specifically for people with bad or no credit. The good thing about HSBC is that when you apply, you will go through a pre qualification process that does not pull your credit report, but will give you an idea of the card(s) you may qualify for in advance.

Capital One- I received a Platinum card from Capital One with a 0% balance transfer for a year. I did transfer a balance from a higher interest card, but was also approved for an Orbitz card by Capital One which allows me to earn rewards. I was approved for both of these cards 2 or more years after my bankruptcy was discharged. Capital One also has a pre qualification process that allows you to decide in advance if you are interested in the card(s) you may be offered.

It is important to know ahead of time which ones you may have a shot at before you go applying around as each inquiry will stay on your report for 2 years. If you rack up a bunch of inquiries, whether you were approved for the cards or not, it could appear as though you are credit shopping (ie in a pinch so trying to get a ton of credit fast) and could hurt your credit score. I should add that I had nothing on my credit report when I applied for this cards except for the accounts that were included in the bankruptcy (which were noted as such on the report). If you are a year or two out from your discharge and have managed to keep it clean otherwise, these cards are worth trying for.

One problem is usually that the account is sold and resold over and over to different collection agencies and so the one that gets the notification of the bankruptcy filing may not be the one that actually has the account anymore. Oftentimes you can dispute these online and then the account will be corrected. Otherwise, you can send a letter with copies of the Schedules of the Bankruptcy Petition showing that the account was included in the bankruptcy. Mail it return receipt requested and keep copies of everything that  you send.

So how exactly should the account be reflected on your credit report?

When your bankruptcy is discharged, the creditors that were included should show up on your credit report with a zero balance and a zero amount due. There should be no past due amounts after the date of the bankruptcy and the account should be reported as “Included in Bankruptcy”. This is basically it. You cannot have late payments on an account that was included in bankruptcy after you’ve filed the bankruptcy. If any of your accounts are being reportedly incorrectly you will need to dispute them with the credit bureau and have them corrected ASAP.

Additionally, the debt should not be reported as a charge off, unless it was a charge off before the bankruptcy. If it shows as a charge off after the bankruptcy, you should dispute this also.

Occasionally, the credit bureau will come back with a status of “verified” meaning they checked on it and the creditor says it’s being reported accurately. Then, you will need to send a letter to the creditor referencing your bankruptcy filing. Include the account number that is being reported inaccurately, and why it is inaccurate, and ask that it be removed or reported correctly immediately.  It is helpful to mention that it is illegal to report information incorrectly to the credit bureau. Again, send everything return receipt requested and this should take care of it for you.

Here is a sample letter from FTC.gov (of course insert your own information)

I should mention that I have never had to send a letter for any of my disputes. Disputing online has always cleared up any inaccuracies that have appeared on my credit report.

If you’re in the process of repairing your credit, it is absolutely crucial that you check your credit reports at least yearly, through annualcreditreport.com. Because of the selling and reselling of accounts, bankruptcy filers especially need to keep up with what is going on with their credit reports. It is not surprising for an old account to suddenly pop up and the sooner you dispute the account and take care of it, the less harm that can be done to your credit score because of it. Plus, it helps you keep track of where you’re going.

Good luck!

By the way, that Walmart credit card is pretty useless. But I’ll cover that some other time.

If you are ever in a similar situation and have accidentally missed your credit card payment, it’s not the end of the world. Unless you “forget” a lot, then those late payments are wreaking havoc on your credit report.

Here are a couple fixes that have worked for me, so far:

Call the Creditor ASAP

As soon as you realize you’ve missed the due date, call the creditor on the phone. Don’t email and wait or write a letter. This will take far too much time. Call the creditor and let them know of your error (or if it’s their error, if it is) and apologize. It seems like a bunch of beggary I know, but sometimes acknowledgment and a simple “I’m sorry, I completely missed it,” go a long ways.

Ask the Credit Card Company to Remove the Late Fee

I’ve done this maybe twice and it both times they have removed any late fees. Although I am aware that it is my fault and I deserve the late fee, it doesn’t hurt to ask and has saved me some money.

Ask that the Payment is Not Reported as Late

This doesn’t always work, after all the payment was late, but you never know. Besides if you catch the missed payment early enough, it won’t be reported as late anyway.  Most companies don’t report a late payment until it is past 30 days. If the payment is still reported as 3o days late, it won’t harm your credit much. 60 days late probably will, but I doubt a payment is accidentally missed when you get to 60 days. As I noted in the beginning, if your payments are consistently late, it will damage your credit report, but one payment a year may not.

Set Up Automatic Payment

I don’t have an automatic payment set up on my cards because even though I am a strictly online person, I don’t have enough confidence in my financial situation to set up a regular monthly payment. This method of payment helps a lot of credit cardholders to stay on top of their payments though without worrying that they may accidentally miss one.

Things come up and it’s a simple mistake that I would guess is fairly common, unless you pay your credit cards off every month. I haven’t gotten to that point yet. If you’ve filed bankruptcy, you want to make sure you stay on top of your payments though to prevent ruining the credit history you’ve work so hard to repair.

One of the most important things you’ll need to do post bankruptcy, if you have any interest in bouncing back, will be to pull your credit reports. I’ve already covered how to get free credit reports previously (legitimately free credit reports), but you will also need to be aware of your FICO score.

Your FICO credit score (Fair Isaac Corporation) is the score that most lenders use to determine your credit worthiness. Unfortunately, you won’t even know what your credit score is simply by pulling your credit reports, because it usually isn’t included. Most of the time you will have to pay for your credit score, even if you are entitled to free credit reports.

The most reliable place to get your credit score, in my opinion, has been www.myfico.com. Two related events are taking place at My Fico currently:

1.  If you sign up for Score Watch, which is a credit monitoring service, you will receive your FICO score free with the service for 10 days. After that you need to cancel or you will be billed $12.95 a month, which is actually quite reasonable. Maybe you don’t think you need credit monitoring, but if you have filed bankruptcy, you really do. Most bankruptcy filers find a number of errors on their reports that only make repairing credit that much more difficult.

2.  If you join the forum at My FICO, you can take the FICO Fitness Challenge, which involves setting a goal in October for your desired FICO score by the end of the year, and taking steps to reach that goal. Even if you haven’t filed bankruptcy, if you feel that your credit may need some work, it may be beneficial to take part in the FICO Fitness Challenge. According to My FICO, the Consumer Federation of America found that consumers could save 28 billion a year in credit card finance charges, just by increasing their credit scores by 30 points.

If you have filed bankruptcy, acquiring your credit reports, your FICO credit score and even taking part in the FICO Fitness Challenge could help out quite a bit in fixing the dent in your credit that the bankruptcy caused. Not knowing these things or taking these steps could end up costing  you more and making the process of credit repair that much more difficult. (And longer.)

You know it isn’t a statement because it isn’t thick with ads and miscellaneous sheets of paper. You suspect it’s notifying you of change that is most likely unfavorable (to you). In the last year, I have received many of these from Chase Bank, beginning with the jacked up interest rate and continuing to the decrease in limit to the “Congratulations! We’re now closing your account loser!”

Well, even though Chase Bank and I have made up, I was still afraid that somehow the mail had brought me bad news. Like maybe another credit card was going to rape me. Or maybe Chase Bank changed their mind about the hardship plan I had set up with them.

Fortunately, the letter began with “We have good news for you!” So I have to thank Chase Bank for reversing the heart attack that the envelope had initially inspired. In their words:

…Your recent payments have qualified your credit card account for our Reage Program and it’s no longer past due. As long as you pay the minimum due each month on your current balance, you will enjoy these benefits:

• no late fees;
• updated credit record to reflect your account is in good standing; and
• no collection calls…

First of all, whoever wrote that form letter was pretty much a genius. The way that it is worded kind of made me wonder if I had actually won something.

So What is the Reage Program?

Since I was pretty sure I hadn’t won anything, (they love me and we made up, but we didn’t actually get married) I decided to go forth and figure out what exactly the good news is about Chase Bank’s Reage Program.

First of all there is a difference between a reaged program like the one with Chase Bank, and the other, which is when people refer to collection agencies “reaging” an account to change the initial delinquency date so the statute of limitations on collection doesn’t run out. If a collection agency does this, it is a violation of the Fair Credit Reporting Act and should be handled completely differently (for starters, congratulations wouldn’t be nearly as appropriate a greeting).

The Reage Program with Chase Bank (or any other credit card company) however, simply means that they will remove the negative history and give you a clean entry on the credit report. In most instances, the account will be removed from the “adverse account” list and noted as “closed by consumer” which of course is better than “closed by credit grantor”. Unfortunately, it will not wipe off any previous late payments, but who can expect that? If your payment was late it was late.

So, it may actually seem like a minor change to an account that I’ve been tussling with for the last year, but it’s good to know it’s being resolved, and in not such a negative manner.

I will check my credit reports next month and let you know exactly how everything turned out.

On another note, regarding the dental bill I was bracing myself for, I did find out that my daughter’s medical insurance includes dental which will cover a lot of the expenses. I use the term “a lot” even though I have no clue, but going from anticipating full payment from my pocket, to whatever the insurance pays, to me is a lot. I couldn’t be more grateful.

“Around here, however, we don’t look backwards for very long. We keep moving forward, opening up new doors and doing new things… and curiosity keeps leading us down new paths.”
–Walt Disney

Have a great weekend, everyone!

Some Things in Life ARE Free…Really

First, I always use www.annualcreditreport.com because it is an automatic credit report from all three credit bureaus (TransUnion, Experian and Equifax) every year for free. Everyone is entitled to a free report once a year, no hassles, no hidden fees. Free.

There are other ways to receive a free credit report, for instance if you have recently been denied credit.  I also read an article at CNN Money today which mentions that companies that offer those other types of “free credit reports” have to disclose that it isn’t actually the annual free report that you are entitled to and that it may be a part of a promotion or marketing for a service or product that costs money. This part of the new CARD act of 2009 will hopefully save a lot of people from getting duped into buying extra credit monitoring services and products just to get a “free” credit report.

The Monster was Quite Friendly, Actually

Anyway, it was to my great surprise that my credit reports aren’t as dismal as I anticipated. There is one medical bill ding on there that I can take care of easily within the next couple months, and one error that I will dispute online immediately. (By the way, 4 out of 5 credit reports have errors which can include anything from accounts that aren’t yours to incorrect amounts owed.)

The only other big problem on my reports was the utilization ratio of my debts. I could see that I need to work harder at paying them down. It doesn’t help of course that Chase Bank dropped my limit on one card to the amount that was owed. Having maxed out cards, or a high utilization ratio (large debt to available credit) can harm your credit immensely. I have paid down 3 small store cards and will continue to pay down the rest using the snowball method.

Hope is Inspirational

These are the only things I need to fix on my credit report, which surprised me quite a bit. Setting up the payment arrangements and making payments is not only getting things paid off but keeping my credit reports a little cleaner than I thought. Well duh…I hear you all saying. But, until you actually take a look it’s difficult to actually see that your hard work is helping. Or in this case what I don’t see (negative items on my credit reports) that have given me hope.

Not perfect by a long shot, but will be soon. Thanks for reading and in a way keeping me focused and accountable.

Have a great weekend and a fantastic family filled Easter!

It seems though, that freecreditreport.com isn’t actually free. You do get a free credit report, but according the a class action lawsuit headed by Erica Possin, a college student in Wisconsin, you also have to pay for something, which means it’s errr, not actually free.

I’ve read different comments on different sites, and some people are saying that it’s clear if you don’t cancel, you’ll be billed $14.95 a month for a credit monitoring service. Of course if you’re expecting something free as the guy in the commercial merrily sings of, you probably don’t pay much attention to the little details that include payment of something.

Here are ways to get a free credit report that is actually free:

One Free Credit Report Per Year- The Fair Credit Reporting Act requires that each of the three credit bureaus, TransUnion, Experian and Equifax, provide one free credit report each, every 12 months. You can request your reports from each agency or you can request all three at annualcreditreport.com.

Credit Denial- If you’re denied credit, insurance or employment, you can request a free credit report within 60 days.

Other Ways to Get a Free Credit Report- If you are unemployed and plan on looking for work in 60 days, if you are on Welfare and if your report is wrong because of fraud or identity theft, you are also entitled to one free report every 12 months.

I would suggest using one of these methods if you need a copy of your credit report and you don’t want to pay the fee of at least $10.50 per report. Otherwise, make sure you read through any agreement thoroughly. Haven’t we learned that from credit card companies? Okay, maybe I didn’t. If you do agree to a service in exchange for something free, mark the date on your calendar or cell phone and make sure you call and cancel if you don’t intend on keeping the service. Also make sure you call before the final day so you aren’t risking any charges you didn’t want.

Here is the copy of the lawsuit

Have you ever signed up for something you weren’t aware of? Let me know, and Happy Super Bowl XLIV!