Fred’s after bankruptcy credit score is 707
Fred M was a small business owner. Because his business was dragged down by the recession, he has $50,000 in credit cards that had gone bad. Last fall Bank of America sent him a warrant-in-debt in a $17,000 credit card. So, Fred filed bankruptcy with me in October 2014. It was discharged in March 2015.
Credit Karma shows his credit score is 707! That’s six months after bankruptcy discharge. The median credit score in Virginia is 694. Six months after bankruptcy, Fred has a better score that half the people in Virginia! Not everybody recovers as fast as Fred. He’s obviously been working hard at it. But this tells you for sure, bankruptcy does NOT mean ten years of bad credit.
In fact, most people who file bankruptcy have a “sharp boost” in their credit score. (That’s not me, saying that. That’s a study of after bankruptcy credit scores by the New York Federal Reserve.)
Fred Wasn’t Bragging When He Sent Me His Credit Report
Fred sent me his credit report because he wanted to make sure it was right.
Ten years ago most people’s after bankruptcy credit reports had three or four creditors still reporting them as late. About fifty lawyers around the country, I’m one, have sued them for ten years. And they have gotten a lot better. I’m thinking now that only about one third of people still have one or two “charge off” or “collection” instead of “bankruptcy discharge” on their after bankruptcy credit report.
It turns out Fred is one of those. Capital One left “collection/charge off” on page 9 of his report. I’m just guessing that’s costing him ten points on his after bankruptcy credit score.
This afternoon, I’m showing Fred how to dispute that. (Fred has to do a dispute because you do NOT have the right to have your credit report right. You only have the right to an investigation.)
If they investigate, Fred’s dispute will fix it. If they don’t, we’ll sue. (This promise to protect your after bankruptcy credit score is part of my exclusive five year bankruptcy warranty.)