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Four Ways to Rebuild your Credit After Declaring Bankruptcy

By Edited Apr 6, 2016 0 0

Bankruptcy is usually the last resort for people who find their debts unmanageable. When you file bankruptcy, you'll instantly rid yourself of your debts and finally put an end to harassing phone calls from your creditors.

However, bankruptcy is hardly a "free pass." It comes with a lot of undesirable consequences such as a bad credit record which will remain on your report for at least 7 years. However, there is no need to despair. With a little effort, it's possible to improve your credit score before the negative records gained as a result of filing bankruptcy even expire. Keep on reading to discover 5 steps that can help rebuilt your credit.

Understand and Familiarize Yourself with Your Current Credit Status

The first step to repairing your credit is to be aware of an understand exactly where you stand. There are three different national credit bureaus. These bureaus are Experian, Equifax, and TransUnion. You'll want to order all three of these reports to get a good idea of your credit status. You can order all three of these reports for free, once a year, from annualcreditreport.com.

Be sure to print all 3 reports and review them carefully. Make sure you're understanding the information listed in the reports from the 3 credit bureaus and make a note of all negative records and check for any inaccuracies that may be damaging your score.

Check the Expiration Dates on Your Negative Credit Marks

Negative marks on your credit report will remain there for at least 7 years. The exact expiration dates will vary between the 3 credit bureaus' reports. Unfortunately, the negative mark on your report will remain even if you've paid your debts and gotten out of a bankruptcy state.

Keep an eye on the exact date of all your negative credit marks, which can include liens, judgments, and late payments in addition to bankruptcy. You'll see a big improvement in your credit score once these negative marks expire. Just knowing that relief is on the horizon will make your damaged credit seem easier to manage.

Dispute Inaccuracies on Your Credit Report

Should you discover any inaccurate records, records which should have already expired, or fraudulant activity in your credit reports, you are legally entitled to send a letter of dispute to the credit bureau responsible for the inaccurate report. This will initiate an investigation so check whether or not your dispute is valid.

Use New Credit Cards to Improve Your Score

You can't do much about your negative marks on your credit score except wait. However, you can work towards improving your credit with new transactions. Try to open up a credit card which is willing to accept applicants with low credit scores. Use this new card responsibly and make all the payments on time. Try to pay off the balance each month. This will improve your credit history and bring up your score over time.

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