Post-Bankruptcy Survival: Preparing For Future FICO Changes

October 21, 2011 by  Filed under: Bankruptcy 

Changes in the credit reporting industry have already begun taking place. Right now the three major credit reporting agencies, Experian, Equifax and TransUnion are providing lenders with an estimate of a debtor’s income upon request. And FICO announced that they are planning to collaborate with the data provider company CoreLogic to make available to mortgage lenders a separate credit score which includes payday loans, evictions and child support payments. And that’s not the end of the changes coming to how a debtor’s FICO score is tabulated, the agencies and lenders want to know everything from how timely borrowers make health insurance payments to the amount of money they spend on their cell phone. What can debtors exiting bankruptcy do to prepare for these changes? Let’s take a look at a few tips:

Get Informed

Bankruptcy debtors should find out if their utility providers and/or landlord is reporting their payment information to the credit bureaus. And if the information is reported to credit bureaus, bankruptcy debtors should inquire about getting a copy of these special credit reports. Debtors have the right to know what type of information is reported to a potential lender and they have a right to know if this information is reported accurately. At this point it isn’t clear how the agencies will make these special credit reports accessible to consumers; but bankruptcy debtors shouldn’t wait for them to announce their intentions, take the proactive stance and request a copy via a letter.

Check For Accuracy

Once a bankruptcy debtor discovers that rent payments, payday loans and other items are on their credit report, which haven’t traditionally been reported in the past, they should carefully check these items for accuracy. The lending industry is justifying their dig for additional information by saying they need a more rounded view of the debtor, but there is a risk that erroneous information will taint a bankruptcy debtor’s credit report when submitted by businesses unfamiliar with how to report payment history. In other words, a higher risk of errors may exist, so bankruptcy debtors should prepare themselves.

Tread Carefully After Bankruptcy

Exiting bankruptcy and getting on your feet can present challenges. Some bankruptcy debtors may run late on rent payments, child support, utilities etcetera, as they try to play catch-up. Because these items may find their way onto a post-bankruptcy debtor’s credit report, debtors must move cautiously and make sure they make timely payments. But don’t just make timely payments; make sure you have proof of these payments just in case you need to challenge an inaccurate entry on your credit report.

Reed Allmand, sponsoring attorney for, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit for up to date news and information you need to know.

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