Repair Your Credit Score After Bankruptcy

So here you are, post bankruptcy with a terrible credit score. The thing that sucks is that regardless of why you filed bankruptcy or that you had excellent credit score prior to filing, a bankruptcy on your credit report is devastating.

Unfortunately the mathematical algorithm used to calculate your credit score is not subjective and does not care that you always paid your bills on time or that your business went under because of the economy. You are thrown into the category of fiscally irresponsible anyway and must dutifully fight your way out.

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Since the idea is to get back on your feet ASAP, the first item on your agenda post bankruptcy should be to immediately start repairing your credit score. Yes, the bankruptcy is on your credit report for up to ten years, however, that shouldn't stop you from aggressively pursuing a better credit rating starting NOW!

Let's review quickly (because you can find this information anywhere on the web) just exactly what makes up your credit score in the first place.

Your payment record. Pay on time = good. Pay late = bad. Length of credit history. The longer you have had a credit history the better. Amount you owe versus credit available. Low balances with high credit available = good. High balances with no credit available (maxed out) = bad. Kind of credit. Various types of credit (installment, auto, mortgages, credit cards) = good. Few kinds of credit (only credit cards for example) = bad. Credit inquires. Rate shopping or shopping for a car are supposedly do not have a negative impact; shopping for a multiple credit cards may be a sign that you are financial distress.

Now most people of reasonable intelligence have a basic understanding of what makes up a good credit score. Pay your bills on time and don't max out your credit cards and lines of credit. But where should you start when trying to repair your credit from a devastating bankruptcy?

A good place to start is with item number three from the list above. Getting new credit can be tricky after you file, but it can be done. DON'T GIVE UP. Search online for credit card companies that offer credit cards to people who have a bankruptcy on their record. Use the card regularly, make your payments on time, don't max it out and don't always pay it down to zero (leave or so as a balance).

I was surprised to find (and be accepted for) a credit card through Orchard Bank that offered reasonable terms and no security deposit. Granted they only gave us 0 credit, but you have to start somewhere!

After a few months (being careful not to have too many credit inquires), apply for another card. Gas cards and in-store cards may also be easier to obtain post bankruptcy. Keep building your available credit while keeping your balances low.

Being careful not to only have credit cards as your only source of credit, you might want to explore adding another kind of loan into the mix. For example a small installment loan or automobile loan with a co-signer would be a good place to start.

Start taking these small steps immediately; don't hesitate for one minute. Start rebuilding today and take advantage of the new start you have been given!

Repair Your Credit Score After Bankruptcy

Solve Debt Problems - Repair Your Credit After Bankruptcy With 5 Simple Steps

If you have an insurmountable amount of debt bankruptcy may be the ultimate means to solve debt problems. When you file bankruptcy you will get immediate relief from your creditors and their harassing calls. When it is finally discharged you will be rid of your debts. Although it has lingering consequences it can be one of the most liberating means to resolve debt problems.

There are consequences of Bankruptcy such as it stays on your credit reports for 7-10 years. However, with a little action there are things you can do that will improve your credit even before the negative bankruptcy expires on your reports. Outlined below are five actions you can take to rebuild your credit.

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Review your Current Credit Status

Reviewing your current credit status is the very first step to take. This will let you know exactly where you stand.

You will want to get a copy of your reports from all three of the credit bureaus which are Experian, Transunion and Equifax. You can order these reports all very easily and securely online. Print each report out and you'll want to review them each very closely. Highlight any negative records or inaccuracies which are affecting your credit score.

Check Expiration Dates

The law currently states that bad credit will remain on your report for 7-10 years. However, the date of expiration may be different with each of the three reports when you review them.

What you want to do is check the exact date of the bad records these include liens, judgments, late payments, bankruptcy filings, charge offs, and discharges. Make sure the reports are accurate and have any of them that are not corrected. By correcting any errors on your reports you will see a remarkable improvement in your credit scores after the issue expires.

Have Errors on Your Credit Report Amended

While reviewing your credit reports if you find fraudulent accounts, inaccuracies, errors, or records that should have expired you have the right to send a dispute letter to each of the credit agencies. You can send a separate letter to each of the agencies that have the errors. At times you will find discrepancies between the agencies. The credit bureaus will initiate a 30 day investigation to verify the errors and then will correct the inaccuracies on your credit reports.

Establishing Good Credit

There isn't any means of removing bad credit which is accurate from your report. So, the best means of improving your rating is to add good credit history to it. Establishing a new pattern of behavior with good credit is a major factor in building new credit and receiving new sources of credit and favorable interest rates and terms. There are credit cards at banks such as Orchard which are designed for those re-establishing their credit.

You must make certain that you use this credit wisely and make all payments on time. Over time you can obtain additional lines of credit and this will raise your credit scores even higher.

Subscribe to a Credit Monitoring Service

By subscribing to a credit card monitoring service you be able to easily track your credit scores quickly and observe their improvements. As you begin using your new credit responsibly this new credit builds a positive history and boosts your score even higher.

The Bottom Line

If Bankruptcy becomes your only way out to solve debt problems and get out from under this huge burden, it doesn't have to be a ball and chain for the next 7-10 years. You do however need to take a few simple actions to restore and build your credit rating.

Solve Debt Problems - Repair Your Credit After Bankruptcy With 5 Simple Steps