| How To Rebuild Your Credit After Bankruptcy |
 |
 |
 |
| Written by Stephen Trezza |
| Saturday, 15 August 2009 14:16 |
|
When you are going through a bankruptcy, just getting through the process can be overwhelming. However, if you have filed for bankruptcy, it is important to remember that you still need to begin rebuilding a strong credit rating. Your financial future depends upon it.
When you are going through a bankruptcy, just getting through the process can be overwhelming. However, if you have filed for bankruptcy, it is important to remember that you still need to begin rebuilding a strong credit rating. Your financial future depends upon it. A Chapter 7 bankruptcy will stay on the filer's credit report for 10 years. All debts discharged in the bankruptcy will be listed as "discharged in chapter 7 bankruptcy." No debt amounts or other details will be listed on the credit report for these debts. Chapter 13 bankruptcies take longer to remove from one's credit report. The actual bankruptcy itself stays on for only seven years. However, this seven-year period does not officially begin until the debtor completes a Chapter 13 payment plan. Following through on this plan usually takes about five years. So if you have filed a Chapter 13 bankruptcy, it takes about 12 years to have it removed from your credit report. Even though, bankruptcy is listed on a credit report for many years, the debtor can still begin to rebuild their credit. The first step is to obtain a secured credit card and be careful to pay off the balance every month. Secured cards usually have a yearly fee of about $30 and require that the holder deposit cash up to the credit limit of the card. While this might seem like a hassle and an expense and maybe even a little overwhelming to obtain, it is important to note that a secured credit card appears on a credit report like any other credit report. As the months go by, those on-time payments and lack of a credit card balance will reflect positively on your credit report. It may take as little as six months to see an improvement. Usually a non-secured credit card can be obtained about a year after filing for bankruptcy. This also will help improve a credit score. In addition, if the filer can qualify to purchase a vehicle or furniture and continue to make on-time payments, the credit score will continue to improve. The good news is that if a filer who works to rebuild credit can see their credit score rise up to between 650 and 680. As more negative items, such as late payments, begin to disappear from the credit report, this score will continue to rise. It is good to keep in mind that credit reporting agencies focus on the most recent credit history, within the last three to five years. When you establish positive credit history and continue to maintain it, your score will continue to get stronger. Make sure you check your credit report each year to see that there are no errors. If errors are found, be sure to contact the credit reporting agency and rectify the situation. If you have filed for bankruptcy and also have a foreclosure on your credit, obtaining another mortgage can be very difficult. The foreclosure will stay on a credit report for seven years. Despite this, if the debtor continues to improve the credit score, this foreclosure won't have as much impact if the filer wishes to apply for a new mortgage. A bankruptcy filer with a foreclosure may qualify for a new mortgage in about three to four years, provided that it has been at least two years since filing for bankruptcy. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Stephen Trezza has effectively managed thousands of cases, including many Arizona bankruptcy cases. For further information regarding Tucson bankruptcy court, check out the FileBankruptcyinArizona website now. |
| Last Updated on Saturday, 09 October 2010 18:29 |