How to Start Credit Repair after Bankruptcy
Rebuilding your credit after bankruptcy is gradual process requiring self-discipline, commitment and persistence. Follow these tips to succeed:
Tip# 1 on credit repair after bankruptcy:
Get a copy of your credit report from each of the 3 main credit- reporting bodies, which are Equifax, Experian and Transunion. Each organization keeps separate records of your credit history so you need to secure a copy of each. Credit and loan companies use the information on your credit report to determine if you are credit worthy so it is important to make sure your records are straight and accurate.
If there are any mistakes on your credit report may it be a wrong address, employment record, or credit payment information, make sure that you contact the reporting body. They will have 30 days to verify the information and if they fail to do so, whatever error you found should be removed.
Tip# 2 on credit repair after bankruptcy:
If your credit report is accurate but it contains unfavorable information such as your bankruptcy filing, you cannot do anything else about this but wait for it to be erased from record after 7 to 10 years depending on which chapter you filed. There are no shortcuts and exemptions to this rule. Never fall for companies who claim otherwise.
Tip# 3 on credit repair after bankruptcy:
In order to fix your credit after bankruptcy you need to secure new lines of credit through which you can show how you have improved in terms of meeting financial dues. However, do not jump at every chance you get to apply for a new credit card or your credit rating will further suffer. Instead, apply only where there is a big chance of you getting approved. You can start by applying for a secured credit card, where you are required to deposit cash in a savings account as collateral and the amount of which will be your credit line. For instance, if you deposited $1000 in the account then you can only charge up to that amount. While the arrangement is quite restricted, a secured credit card is the best option for people with damaged credit to eventually qualify for a regular credit line.
Tip# 4 on credit repair after bankruptcy:
The best way to restore your credit status after bankruptcy is to pay promptly and regularly all your existing financial obligations and other debt that were not discharged such as student loans. When you apply for credit or loans after bankruptcy, lenders will be more concerned about how well you have handled your finances after filing bankruptcy. Being financially responsible is the best credit repair after bankruptcy. In as short as two years of timely payments, you will be able to get lower rates and better deals on new lines of credit.
Tip# 5 on credit repair after bankruptcy:
Control how many new credit lines you open. Before getting a loan or a credit card, ask yourself – is it absolutely necessary? Can I honestly afford to pay it back? The goal of credit repair after bankruptcy is for you to be able to qualify for credit should you absolutely need it and, more importantly, to prevent you from making the same mistake twice of incurring too much debt.