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Why payments don't show up on credit reports, and how to fix it

bankruptcy-mortgage-not-credit-report

When you file for bankruptcy, the law says that you must list all of your debts, even if you are going to keep on paying them, such as your mortgage or car payments.

When you list a creditor in bankruptcy, the creditor receives a letter or email notifying them of the bankruptcy. After they get this notification, the creditors then report to the credit bureaus that the loan was “included in bankruptcy.”

Creditors are allowed to do this even if you keep paying the loan. This is because technically it only says “included”, not “discharged” in bankruptcy.

Congress says that all debts must be included in bankruptcy, even if they survive the bankruptcy. The lenders also stop reporting the payments on that loan even though you are still making them. This explains why payments don’t show up on credit reports.

Is this fair?

This doesn’t seem fair, does it?

Perhaps you filed Chapter 7 bankruptcy or Chapter 13 bankruptcy so that you could keep up on your house or car payments. You have been making your payments on time every month to build your credit history, but these payments don’t show up on credit reports.

Now, you know that the lender is getting the payments and crediting them to your account because they send you bills and statements every month. Also, they haven’t started foreclosure or repossession proceedings so they must be being paid.

So why is the information on your credit report wrong?

I don’t know, but my suspicion based on my experience as a bankruptcy attorney says that creditors don’t report the payments so that your credit score does not recover as quickly as it should.

How to make credit bureaus report your payments

Fortunately, if payments don’t show up on credit reports,you can do something that will force the lenders and credit bureaus to give you credit for all of your post-bankruptcy payments.

If you’re fed up seeing that your payments don’t show up on credit reports, do something about it now.

First, request a payment history from your lenders (such as the mortgage company or car finance company), and use it to dispute the incorrect entries. Lenders are required by law to give you a payment history once per year if you request it.

To get the payment history, just call the customer service number and request a payment history.

Then, take this payment history and use it to dispute the missing payments on the loan. Each of the three credit reporting agencies (Equifax, Experian  and TransUnion) has a fairly easy dispute process.

The best way to do this is to go to www.annualcreditreport.com. This website allows you to both request credit reports and dispute inaccuracies. Make sure that you attach your payment history when you make the dispute.

As there are 3 credit-reporting agencies, you will need to dispute it with each of them. You may have to do this once per year, because the lender may not start reporting your payments even after you have successfully disputed it with the credit bureaus.

What if I reaffirmed the debt?

A reaffirmation agreement is a contract that takes a certain debt outside of bankruptcy.

If you sign a reaffirmation agreement with a secured creditor, then they will usually report your payments to the credit bureaus after the bankruptcy.

This is usually a good idea for first mortgages, but not necessarily a good idea for second mortgages and car loans.

Conclusion

Now you know what to do if your payments aren’t showing up on your credit reports, and what you can do to make sure they do.

If you’re still having problems, and wondering why payments don’t show up on credit reports, then contact us at 612.824.HELP today.

We’ve helped over 40,000 people become debt free in Minnesota, how can we help you?

Photo Credit: © Alexmillos | Dreamstime.com

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