How to Correct Your Credit Reports When Your Mortgage Payments are Not Reported Post Bankruptcy Discharge

It can be risky to reaffirm a mortgage in a bankruptcy, particularly when the property is underwater (worth less than what is owed), or you may need to move and sell quickly. A reaffirmation agreement puts you back on the hook to pay for the full amount of the mortgage, including interest, taxes, insurance, foreclosure fees and costs after a bankruptcy, if you elect to keep the home. Why would someone ever sign one of these? Well, most mortgage companies do not report payments being made on a non-reaffirmed mortgage. So how do you avoid the risk, while at the same time, benefit from timely payments being made which rebuilds credit?

SELF REPORTING MORTGAGE PAYMENTS

WHEN YOUR LOAN WAS NOT REAFFIRMED

The bankruptcy code does not require that you reaffirm, or sign a court order agreeing to continue the payments on your mortgage. But unless you are surrendering your house, you will want to continue paying because the house will eventually be foreclosed if you do not.

Mortgage companies will not report your payments to the three major credit reporting agencies (Experian, TransUnion, and Equifax) if you have not reaffirmed. It is possible, nonetheless, to still get your payment history included in your credit report, as follows:

Request a payment history from the mortgage company. (The mortgage company is required by law to provide one every year free of charge.) There is no special form – just call your mortgage company and be persistent.
File a dispute with the three credit reporting agencies, attaching a copy of the payment history.
The credit reporting agency is required to verify the accuracy of the debt with the mortgage company within 30 days.
At that point, the mortgage company can either:

Remain silent – the credit reporting agency must accept the information you provided; or
Accurately report information. The mortgage company would be hard pressed to explain how a payment history it prepared was inaccurate.
Repeat this process on a regular basis, to update the information.

Additionally, you should keep the payment history, since that can be provided to anyone you’re applying to for new credit.