diff --git a/.gitignore b/.gitignore
index 0159b57..0b68e8f 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,3 +1,3 @@
-/coverage.txt
+/coverage.*
 /vendor
 /build/
diff --git a/Makefile b/Makefile
index 8793e4b..ded2fb1 100644
--- a/Makefile
+++ b/Makefile
@@ -3,6 +3,10 @@ GOCMD = go
 GOTEST = $(GOCMD) test 
 WASIRUN_WRAPPER := $(CURDIR)/scripts/wasirun-wrapper
 
+# Coverage
+COVERAGE_REPORT := coverage.out
+COVERAGE_MODE := count
+
 GOLANGCI_VERSION ?= v1.64.5
 TOOLS_BIN := $(shell mkdir -p build/tools && realpath build/tools)
 
diff --git a/osfs/os.go b/osfs/os.go
index 75e7c85..216ce68 100644
--- a/osfs/os.go
+++ b/osfs/os.go
@@ -14,7 +14,7 @@ import (
 )
 
 const (
-	defaultDirectoryMode = 0o755
+	defaultDirectoryMode = 0o777
 	defaultCreateMode    = 0o666
 )
 
diff --git a/osfs/os_bound_test.go b/osfs/os_bound_test.go
index 78273d3..06daa86 100644
--- a/osfs/os_bound_test.go
+++ b/osfs/os_bound_test.go
@@ -1285,8 +1285,24 @@ func TestRename(t *testing.T) {
 	require.NoError(t, err)
 	require.NoError(t, f.Close())
 
-	err = fs.Rename(oldFile, newFile)
-	require.NoError(t, err)
+	if runtime.GOOS != "windows" {
+		reset_umask := umask(2)
+		err = fs.Rename(oldFile, newFile)
+		require.NoError(t, err)
+		reset_umask()
+
+		di, err := os.Stat(filepath.Dir(filepath.Join(dir, newFile)))
+		require.NoError(t, err)
+		assert.NotNil(di)
+		expected := 0o775
+		actual := int(di.Mode().Perm())
+		assert.Equal(
+			expected, actual, "Permission mismatch - expected: 0o%o, actual: 0o%o", expected, actual,
+		)
+	} else {
+		err = fs.Rename(oldFile, newFile)
+		require.NoError(t, err)
+	}
 
 	fi, err := os.Stat(filepath.Join(dir, newFile))
 	require.NoError(t, err)
diff --git a/osfs/os_chroot_test.go b/osfs/os_chroot_test.go
index ff3fecf..e1c3804 100644
--- a/osfs/os_chroot_test.go
+++ b/osfs/os_chroot_test.go
@@ -47,3 +47,25 @@ func TestCapabilities(t *testing.T) {
 	caps := billy.Capabilities(fs)
 	assert.Equal(t, billy.AllCapabilities, caps)
 }
+
+func TestCreateWithChroot(t *testing.T) {
+	if runtime.GOOS == "windows" {
+		t.Skip("Skipping POSIX umask tests on Windows")
+	}
+	fs, _ := setup(t)
+	reset_umask := umask(2)
+	chroot, _ := fs.Chroot("foo")
+	f, err := chroot.Create("bar")
+	require.NoError(t, err)
+	require.NoError(t, f.Close())
+	assert.Equal(t, f.Name(), "bar")
+	reset_umask()
+
+	di, err := fs.Stat("foo")
+	require.NoError(t, err)
+	expected := 0o775
+	actual := int(di.Mode().Perm())
+	assert.Equal(
+		t, expected, actual, "Permission mismatch - expected: 0o%o, actual: 0o%o", expected, actual,
+	)
+}