Will Lexington Law Remove a Bankruptcy From Your Credit Report?
Errors on credit reports are common. According to the Federal Trade Commission, "one in five consumers have an error on one their three credit reports." Errors are so common that credit repair companies like Lexington Law focus their businesses on fixing errors appearing in consumer credit reports.
Credit repair appeals to many people because small improvements in your credit score can make a difference between qualifying for or being denied credit. It also affects your interest rate for mortgages, auto loans, and credit cards. Some insurance companies base their rates on your credit score. Many landlords check credit reports and the presence of a bankruptcy could lead to the rejection of a rental application.
Bankruptcy, Your Credit Score, and Your Credit Report
Bankruptcy is the single most devastating action that can harm your credit score. Depending on your existing score, a bankruptcy can slash your FICO score from 130 to 240 points. Given the harm a bankruptcy causes, it is natural to want to remove it from your credit report as fast as possible.
A bankruptcy notation appears on your credit reports, listed in the Public Records area, after you file for bankruptcy. Your credit report shows the kind of bankruptcy you filed for (Chapter 7 or Chapter 13), the filing date, and the date of discharge or dismissal.
Importantly, the accounts you include in your bankruptcy will also have a notation on your credit report that shows anyone viewing your report that a bankruptcy took place. Under each account that you listed in your bankruptcy, there is a notation that says something like, "Account included in bankruptcy."
Can Lexington Law Firm Remove a Bankruptcy Successfully?
The key to whether Lexington Law, another credit repair firm, or you, acting on your own, are able to remove a bankruptcy is whether the notation on your credit report is accurate.
As mentioned, it’s really easy for incorrect information to appear on your credit credit report. Lexington Law is careful to write on its Web site its services are designed to remove incorrect information appearing on credit reports.
There are a few ways that it is possible for a bankruptcy to appear on your credit report improperly. The most common are due to a confusion about identity, such as:
- You have the same first and last name as someone who actually filed for bankruptcy.
- There is confusion over the suffix to your name. For example, John Smith, Jr. ends up with the bankruptcy showing on his credit, when his father John Smith Sr., is the one who filed.
- Your Social Security Number is confused, in error, with another person whose SSN is similar to you.
If you did not file for bankruptcy, but your credit report shows that you did, then you can dispute the mistake on your own or hire a credit repair firm. The credit bureaus will check with the court and verify whether your dispute is correct or if you indeed are listed as having filed for bankruptcy. If you did not file for bankruptcy, the notation will be removed.
Removing a Bankruptcy When You Actually Filed
According to Lexington Law, it removed 21,417 bankruptcies from client credit reports in 2012. This impressive number is misleading, however. Equifax, Experian, and TransUnion each publish information about your payment habits.
If Lexington Law removes erroneous reports for you from Experian and Equifax, it counts this as two removals. Also, Lexington Law does not subtract removals from its total when removals are later reversed and reinserted onto consumers’ reports.
A big problem with companies like Lexington Law Firm is the possibility that they over-promise what they can accomplish for you.
On Lexington Law's website, it is careful not to guarantee success when you hire them. While Lexington Law may make it clear that they can't guarantee removal, the fact that they list how many bankruptcies they've been successful at removing may lead consumers to make the leap that even accurate bankruptcy notations can be deleted.
Also, a representative you speak to on the phone may indicate that they will try to remove the bankruptcy, but leave you with the impression that accurate information can be removed.
Even if they were lucky enough to get an accurate listing to be removed from your Public Records area of your report, the individual accounts that you included in your bankruptcy remain on your report. Their notations would show that they were part of your bankruptcy.
If you applied for a loan or credit account, after a bankruptcy you actually filed was removed, an underwriter would see the derogatory account history and be highly unlikely to approve your loan or credit application.
It's also the case that accurate negative information that is removed from a credit report can reappear.
File a Dispute on Your Own
There is nothing that Lexington Law can do for you that you can't do for yourself. When it comes to removing a bankruptcy that shows on your report, file a dispute with each of the consumer credit reporting agencies when the bankruptcy appears in error. If you don't feel you can handle filing a dispute yourself or are too busy to take care of it, then you should consider hiring Lexington Law or another credit repair firm.
Don't hire anyone to dispute a bankruptcy that you actually filed. The bankruptcy should fall off your credit report 10 years after the filing date, according to federal law. The credit bureaus remove Chapter 13 bankruptcies after 7 years. The negative accounts included in the bankruptcy should fall off 7 years after their date of first delinquency,even if the bankruptcy notation remains in the Public Records area.