| Rebuild Your Credit After Bankruptcy |
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| Written by Harvey L. Cox |
| Wednesday, 25 March 2009 01:03 |
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After you complete your bankruptcy, you'll have a really noticeable sense of relief. You're starting a new chapter in your life. You're now set for a brand-new beginning financially. But, before you'll be able to really get going in your new financial life, you'll want to initiate the process of rebuilding your credit.
After you complete your bankruptcy, you'll have a really noticeable sense of relief. You're starting a new chapter in your life. You're now set for a brand-new beginning financially. But, before you'll be able to really get going in your new financial life, you'll want to initiate the process of rebuilding your credit. Straighten Out Your Credit Report One of the first things you'll need to do after bankruptcy is to get a copy of your credit report and make sure it doesn't incorporate any of your pre-bankruptcy debts. Under federal law, you can get a free copy of your credit report every year. Contact the three leading credit reporting agencies, TransUnion, Equifax and Experian, to request a copy of your free credit report. Once you have your report make sure you check over it very carefully. You should pay special attention to any listings of any debts that you had before filing bankruptcy. All of those pre-bankruptcy debts must be removed. But, it's very common for people to find those old discharged debts still shown in their credit report. If you discover any of those pre-bankruptcy debts in your credit report, you'll want to write a letter to the credit reporting agencies calling for them to get rid of the inaccurate listings. Put Positive Data on Your Credit Report One of the quickest and easiest ways to rebuild credit after bankruptcy is to apply for a secured credit card. A secured credit card is supported by money that you deposit into an account. If you fail to make your payments, the creditor is allowed to take the money out of the account to cover the amount you owe. Since payment is secured, these kind of cards are really simple to obtain. And, almost all of them report to the credit bureaus. Normally, after 6-12 months of timely payments you may be able to qualify for a unsecured credit card. Credit bureaus, however, don't know whether a credit card is secured or unsecured. So, a secured credit card helps build your credit after bankruptcy. Rent to Own centers are another great means to rebuild credit after bankruptcy. Almost all rent to own centers will approve an account for you as long as you have the income to pay the loan back. The drawback to using one of these accounts is that you'll pay more for an item than if you just went out and bought it. The overall boost to your credit score, however, more than makes up for the additional cost of the item. After 6-12 months of prompt payments on your secured credit card and rent to own account you can apply for other more traditional credit. Rebuilding Your Credit After Bankruptcy Is Possible Bankruptcy will indeed lower your credit score. But, following bankruptcy you'll be able to rebuild your credit. Commit yourself to removing your pre-bankruptcy debts and contributing new good credit information to your credit report. Within 6-12 months, you'll improve your credit score significantly. As a matter of fact, if you'll adopt the steps listed here, you'll be able to wholly rebuild your credit after bankruptcy. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. To get more informative tips on rebuilding your credit after bankruptcy check out The Bankruptcy Law Info Center. |