The Consumer Fair Reporting Bankruptcy Act of 2015

Website design By BotEap.comDid you know that banks and other creditors can continue to list a debt on your credit report even after that debt has been paid? When your credit report reflects unpaid debt, your credit score can drop dramatically. In some cases, that bad credit score may even mean that you will have to pay extra interest in some cases or that you may not be able to get any credit from other lenders.

Website design By BotEap.comA new bill proposed by Senator Sherrod Brown called the ‘Consumer Bankruptcy Fair Reporting Act of 2015’ would prevent banks and creditors from including a debt on a consumer’s credit report once that debt has been erased with a bankruptcy discharge.

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Website design By BotEap.comThe new bill (if approved) would require creditors to contact the consumer reporting agency once the debt has been paid off. If that debt has been discharged in the bankruptcy and is at zero, creditors would have to report the debt as such.

Website design By BotEap.comHow big is this problem? Right now, an estimated one in five consumers has an error on their individual credit report. Personally, we think this number is too low and is actually over 50%. This means there are major errors on many credit reports, and even if you think your debt has been paid off and cleared, it may not.

Website design By BotEap.comAside from the fact that you may have difficulty getting a loan approved, not reporting debt as “zero” may also mean that the consumer will be charged more interest on additional obligations due to their debt-to-income ratio. Unfortunately, many consumers don’t bother to review their reports after paying off a debt. The new bill would protect consumers who have filed for bankruptcy and are therefore entitled to have that debt removed from their credit records.

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Website design By BotEap.comThe aforementioned bill hasn’t passed yet, but there are a few things you can do to make sure the debts you’ve paid off show up on your credit report. First, always check your credit report to make sure that debts that have been paid are accurately reflected on that report.

Website design By BotEap.comIf you see any discrepancies on your credit report, it’s up to you to dispute the debt. Second, stay on top of your credit report by reviewing it once a year. You never know if the information being reported is accurate, and it will only benefit you to keep up to date.