Arizona Credit Reports and Bankruptcy

At the core, most of our clients aren’t just looking to file bankruptcy to get out of debt. Most of our clients are really searching for a way to get back into the financial mainstream. They aren’t looking to get back in debt but to have the options that they used to enjoy before their debts became unmanageable. 

Since getting back into the financial mainstream after bankruptcy is important. We pay a company to help our clients rebuild their credit scores and we provide this service at no additional charge. The first step of rebuilding credit after bankruptcy is understanding how a credit report works.

A credit report is simply a record of your borrowing and repayment history.  You likely have a record on file with the three major national credit bureaus, Experian, Equifax, and TransUnion. Most of your creditors submit monthly electronic reports on the status of our accounts. You can’t get away with much without having all of the particulars reported to at least two out of the three major national credit bureaus.

The report will list the date you initiated your account, the type of account (mortgage, credit card, etc.). It will also reflect whether the account is now open or closed, the amount of your monthly payment, the latest activity on the account, the current balance, your credit limit as well as any amounts that are past due.

Each of your accounts has a code that notes whether the account is current and if it is past due for how long. It will show whether the account involves a charge off, repo or any other collection activity.  The report will also list under “inquiries” who has asked for a copy of your credit report within the last two years.  

Most would be creditors will not look at any of this information but will focus only on your credit score, the mathematical representation of all the individual items in your credit report. Credit scores range from 350 to 900.   The biggest negative factor on your credit score is when a debt is reported as 30 or 60 days overdue.  Another huge negative takes place when your account is turned over to a collector.  

Most utilities will not report your delinquent status until they deem the balance is uncollectible. This means that there may be no negative impact on your score to be late in paying your utilities. 

Surprisingly most medical providers will not report your debt to a credit reporting agency.  It is only when a medical debt is turned over to a collector that the debt is normally reported. Unfortunately, most medical providers are pretty quick to turn over accounts to collectors. Though landlords are unlikely to report back due rent to a credit bureau, larger landlords are likely to report problems to tenant screening companies that landlords use to evaluate applicants.  This means that back due rent and evictions won’t have much of an impact on your score, but your rent payments are less likely to affect your credit score than your ability to find another apartment.

The vast majority of public records, such as tax liens, collections lawsuits, and judgments are not factored into your score.  However, the underlying back due debts are reported even if the judgment goes unmentioned. 

Contact Us

Set up a consultation at Phoenix Fresh Start Bankruptcy Attorneys to see how bankruptcy could be the route to returning to the financial mainstream. You can have the credit score that has been eluding you.