Can you really get that bankruptcy legally removed from your credit report? If only it were so easy.

After bankruptcy you’re looking to rebuild your credit. That’s understandable because you want to be able to get financing for a car or a new home at some point.

You do some searching online, or maybe you get a letter in the mail from a reputable-looking company that promises to remove that pesky bankruptcy from your credit report immediately. Your bankruptcy lawyer told you it would show up on your credit report for ten years.

Remember grandma, who said that if something sounds too good to be true then it likely is.

The Fair Credit Reporting Act governs the information on your credit report, and exists to ensure accuracy of information. Note that it does not mention anywhere that you’ve got to like what’s showing up – just that it’s correct.

If you file for bankruptcy, that’s a fact. There’s nothing that will change it. You can rail against the system, but it’s not going to provide solace or lead to a different outcome.

Disputing The Bankruptcy On Your Credit Report

The Fair Credit Reporting Act does, however, give you a mechanism for disputing inaccurate information on your credit report. When you send in a dispute letter to the credit reporting agency, they’ve got a responsibility under the law to investigate. If the information can’t be verified within thirty days, it must be removed.

So here’s the trick that many “credit repair companies” use. They send in a dispute letter demanding removal of the bankruptcy as well as anything else you don’t happen to like. If the information is verified, another letter goes out. On and on until someone fails to verify the information, or the credit reporting agency gets sick and tired of being bothered.

At that point, the company proudly shows you that the information is gone.

Sounds Sweet, Right?

Not so much. First of all, you’ve got a company making inaccurate and fraudulent statements to a third party. I’ve never seen a consumer prosecuted, but it doesn’t pass the smell test to me.

Second, you forget that most credit information is updated every 30-90 days. So that negative information is sure to come back at some point.

Third, you’re paying a company to write letters for you. Do you really have that much spare change sitting around that you can afford to throw cash out the window on a futile and dishonest endeavor?

The (Not So) Bad News

The bankruptcy is going to stay on your credit report for up to ten years, and there’s nothing you can do about it. But the truth is that nobody cares – even your future creditors.

Credit is largely a matter of recency. What you did last month is more important than what you did last year assuming, of course, that you’ve done good things in the more immediate past. Set to work on adding good information to your post-bankruptcy credit report and you’ll be just fine.

Jay S. Fleischman is a bankruptcy lawyer who concentrates in helping people fight back against debt collection harassment after bankruptcy. He has never seen a credit repair company that can successfully eliminate accurate information, and hates seeing people get taken for a ride.

Image credit:  cybertoad