Re Establishing Your Credit After Bankruptcy

Learn the Best Practices for Re-establishing Your Credit After Bankruptcy

Building a Better Credit Report

Your credit report is a file about you. It is full of information on where you live, how you pay your bills, whether you have been sued, arrested or filed for bankruptcy. Creditors use this information to evaluate your applications for credit, insurance, employment or a lease. A credit score is a way for creditors to find out whether to give you credit and how much to charge you for it. A credit score is a total of points from different factors. The factors are your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts. The higher your credit score, the better the chance of you getting a loan.

To re-establish your credit, consider applying for a secured credit card. A secured credit card requires you to open and maintain a bank account or other asset account as a financial institution as security for your line of credit. Your credit line is usually a percentage of your deposit, typically from 50 to 100 percent. It is not uncommon to incur application and processing fees. Further, secured credit cards usually have higher interest rates than non-secured cards.

Improving your Credit Report

Ensure that your credit report is accurate and complete. The creditor and credit bureau are responsible for correcting inaccurate or incomplete information. To correct any erroneous information, follow the instructions at www.equifax.com, www.experian.com, or www.transunion.com. Once the erroneous information has been verified, all three consumer reporting agencies will correct the information and send you a free credit report with the correct information. This credit report does not count as your free annual credit report.

If you have any negative information on your report, which is accurate, time is the only way for it to be removed. Most accurate negative information stays on your reports for seven years and bankruptcies stay on for ten years.

Identity Theft and your credit report

Here are some indications that you may have been the victim of identity theft:

  • Failing to receive mail, signaling an address change by the identity thief.
  • Receiving credit cards for which you did not apply.
  • Receiving calls from debt collectors about merchandise or services you didn’t buy.
  • Denial of credit for no apparent reason.

If you suspect that your identity has been stolen then there are two important steps to take right away.

First, place a fraud alert on your credit reports. Contact any of the three nationwide consumer reporting companies and place a fraud alert on your credit report. The initial credit bureau will contact the other insurance companies and they will also put an alert on your report.

Equifax: 1-800-525-6285 or www.equifax.com.

Experian: 1-888-397-3742 or www.experian.com.

TransUnion: 1-800-680-7289 or www.transunion.com.

Second, close the accounts that you know or believe have been tampered with or opened fraudulently and contact the security or fraud department of each company. Follow up in writing and include COPIES of supporting documents.

The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information used by nation’s consumer reporting companies. There were recent amendments that were made to the FCRA. Those amendments expanded consumer rights and placed additional requirements on consumer reporting companies and businesses that provide information about consumers to consumer reporting companies.

Types of Information that Can be Collected

There are four basic types of information that consumer reporting companies can collect and sell:

  1. Identification and employment information: This includes your name, birth date, Social Security number, employer, and your spouse’s name. It also includes your employment history, home ownership, income, and a previous address.
  2. Payment history: This shows you how much credit has been extended and if you have paid on time. Also, it shows if a creditor has referred your account to a collection agency.
  3. Inquiries: The consumer reporting companies must keep a record of all the creditors who have asked for your credit history within the last year. They must also keep a record of individuals or businesses that have asked to see your credit history for employment purposes within the last two years.
  4. Public record information: This shows events that are a matter of public record, such as bankruptcies, foreclosures, short sales, or tax liens.

If you have questions about rebuilding your credit after Chapter 7 bankruptcy then contact the Dunaway Law Group at 480-389-6529 or message us HERE.

Eviction Judgment and Credit Reports

Do Eviction Judgments Appear on Credit Reports?

Judgments are a very powerful tool that dramatically increases the odds of a creditor collecting against the debtor. In evictions cases a judgment will require the tenant to pay all back rents, late fees, court costs, attorney’s fees, and any other relevant damage.

The eviction judgment is basically mandating the tenant to pay the landlord the sum of these damages. After making a written demand for the awarded damages most people will not voluntarily pay. However, this is where the judgment itself can help you recover your money.

A judgment can give you the power to garnish wages, levy bank accounts, or place liens on certain assets. Without the judgment all you can do is beg for your money. But with the judgment you can get people to pay you whether they want to or not.

credit report

When a landlord obtains a judgment against someone, many people think it automatically go on their “record,” or credit report, but this isn’t always the case. The eviction judgment is a matter of public record, but the only way to guarantee that a judgment will show up on a credit report is to record the judgment with the county. The judgment will stay recorded until the debt is paid, it expires, or the debtor files bankruptcy.

Most Arizona evictions occur in a Justice Court. In order to record the judgment with the county, a certified copy of the judgment must be sent to the Arizona Superior Court to receive a new case number. Once a Superior Court judgment has been established a certified copy can be recorded with the appropriate county. Each of these steps requires a filing fee–as of 2016 the total fees are just over $100.

The judgment will remain on the credit report until it is paid, or for as long as the judgment is valid. In Arizona judgments are automatically valid for 5 years. However, a credit can renew the judgment which will extend it’s life for another 5 years. If the debt is paid in full then the creditor must file a satisfaction of judgment with the county to demonstrate that he debt has been paid in full.

In summary, here are the main things to know when recording a judgment with an Arizona county.

  • The only way to ensure a judgment shows up on a credit report is to record it;
  • If the judgment is paid in full then the creditor MUST file a satisfaction of judgment with the court and then with the county recorder;
  • If not paid, the judgment will remain valid for 5 years, and possible an additional 5 years if it is renewed.

It is a common misconception that eviction judgments automatically appears on a former tenant’s credit report. However, this is not the case. The judgment is public record, and a diligent background checker will find it, but the only way to ensure the judgment appears on someone’s credit report is to record it with the county. Once this happens, it will appear on their credit report as a monetary judgment, but there won’t be any indication that it was also an eviction judgment.

Ideally, a background check will reveal the eviction judgment even without it being recorded with the county. If you are a landlord, you should always perform background checks on prospective tenants.

However, for more everyday occurrences that don’t require a full-blown background check (like applying for a credit card or loan), having a blighted credit report can make life difficult, even if it doesn’t specify that it is an eviction judgment. In Arizona, judgments are initially valid for ten (10) years–and can be renewed–if you file an Affidavit of Renewal with the court/recorder before the end of that time, it will be valid for another next five years as well. The defendant can get the judgment removed from his credit report at any time – all he or she has to do is contact the plaintiff and pay off the judgment.

satisfaction of judgment

Once a former tenant has satisfied the eviction judgment, it is the landlord’s responsibility to file a satisfaction of judgment with with the court. This will provide notice to all interested parties–including future landlords–that the debt has been satisfied. 

If you need help from an Arizona real estate attorney then contact the Dunaway Law Group at 480-389-6529 or message us HERE.