When Will My Bankruptcy Stop Staining My Credit Reports?

A reader’s bankruptcy is due to come off her credit reports, and she wants to know if she has to do anything to “scrub it off” herself.

Q: I filed Chapter 7 bankruptcy on March 1, 2002. Will the credit agencies automatically remove it from my credit history? If so, when? If not, what do I need to do to get them to remove it? – Maria

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A: Under the federal Fair Credit Reporting Act, bankruptcies may be reported for no more than ten years from the date of filing. That means your bankruptcy should no longer appear on your credit reports after March 2012. (If you had filed Chapter 13, where you pay back some of your debts over time, your bankruptcy would no longer be reported after March 2009 – seven years after you filed. That’s because the credit reporting agencies voluntarily stop reporting Chapter 13 bankruptcies – in which debtors pay back some or all of their debts over several years – seven years from the date of filing.)

This “scrubbing” process should happen automatically, and since the ten-year mark is less than a month away, it may already be gone from your reports. It would be a good idea for you to get free copies of your credit reports at AnnualCreditReport.com in late March 2012 to make sure your bankruptcy is gone. Go ahead and order copies from all three major credit reporting agencies; Equifax, Experian and TransUnion. They don’t share information with each other, so you’ll want to make sure each one has stopped reporting that information.

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And while it’s great that you are finally putting this behind you, keep in mind that you need positive credit references to earn a strong credit score. So if you have been avoiding credit, you may want to consider getting a credit card to establish a positive payment record. Keep your balances low and pay your bills on time, and you’ll truly be off to a clean start.

Image: D Sharon Pruitt, via Flickr

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