With the increasing cost of today’s expenditures, the common consumer is left with lesser options on how to budget their money accordingly. According to 2011 statistics on personal American debts, the total debt among consumers has already reached to $11.4 trillion. This figure included all types of debts, with common ones such as credit cards, mortgages, student loans and auto loans. The amount of personal debt that each American consumer has is already piling up.
For most people, the only way to resolve low credit scores would be to file for bankruptcy. In 2011 alone, the total number of bankruptcy filings in the United States has gone up to 1.4 million. Today, filing for bankruptcy is considered as a new slate, and with the provisions given by the Congress as stated in Chapter 13 of the Bankruptcy Law, a person covered in debts can acquire bankruptcy credit repair.
Bankruptcy law in repairing credit
According to federal law, people who declare themselves as bankrupt or anyone who aims to repair their negative credit scores can acquire free credit reports from the three national credit reporting bureau in the country. A credit report is a statement which shows items that might explain to the account holder why they are nearing negative credit scores. Aside from obtaining information on their financial status, an account holder can also inquire regarding any suspicious items that might have been erroneously indicated on the report. In return, it is the responsibility of the agency to provide information as to how these suspicious items were reflected on the report.
Acquiring credit report from the three national bureaus has already helped millions of Americans over the years. In a study conducted by the Consumer Federation of America and NCRA, consumers were able to discover numerous discrepancies on their credit reports:
- 30% of American consumers contain different credit scores on their credit reports from the three agencies, with discrepancies of more than 50 points.
- 80% of the released reports indicate severe inaccuracies
- 96% of credit reports contained different status for delinquencies on paying for loans within the 30 to 90 day payments. From this figures, it was found that 33% of consumers has delinquent status on their mortgage even when they never paid late. In addition, 67% of the consumers were considered as delinquent without missing an instalment account payment.
These inaccuracies and discrepancies only reached the awareness of most consumers after they have acquired their credit reports.
Rectifying mistakes for credit repair
During the process of credit repair, it is the right of the consumer to inquire about any inaccurate information on their credit report as stated by FTC. There will be an investigation and the agency will be given 30 days to provide an explanation. If the agency can’t produce a sufficient reason, it is their responsibility to remove the inaccuracy which they have indicated on the person’s credit report. Undertaking the efforts for credit repair can be quite difficult and time consuming for some. However, it is the only way for a person to rectify his credit scores, especially if he belongs to the 24% whose accounts are already due for denied credit.