Life After Bankruptcy: Repairing Your Credit
So you’ve filed bankruptcy and had many of your debts discharged in bankruptcy. Now what?
There is no doubt that filing bankruptcy will have a negative impact on your credit. However, there are steps you can take after filing bankruptcy that will help rebuild your credit quickly, and help you avoid the circumstances that force many people into financial dire straits.
First, monitor your credit reports to ensure accurate reporting. Sometimes creditors inadvertently misreport debts, payments, and other credit matters. This can seriously impact your credit and prevent you from obtaining a competitive interest rate and prevent you from qualifying for some loans.
How do you access your credit report? It’s easy, free, and with a little diligence, you can track your credit all year at no cost. The three main credit reporting agencies give you a free copy of your credit report once every 12 months. So, if you spread those requests over a year, you can check up on your credit report every 4 months or so for free. Now, just to be clear, each reporting agency gets their information from a variety of different sources, so you can’t be sure you have everything unless you get a copy from each agency. But, you can keep a pretty close eye on your finances by spreading your free reports over the 12 month free period. Remember, companies are responsible for correcting erroneous reports about your credit. If there’s something wrong, they are required to fix it. Also, be sure to remember that a chapter 7 bankruptcy appears on your credit for 10 years, and a chapter 13 for 7 years, so be sure that it doesn’t appear in your credit report after the required time periods.
To get your free credit reports, and for more information about your credit report, visit this website: http://www.consumer.ftc.gov/articles/0155-free-credit-reports
Next, it is a good idea to begin showing creditors you can be trusted financially. It sounds counter-intuitive, but a great way to begin rebuilding your credit after bankruptcy is getting a low-limit credit card and paying it off every month.
If you qualify for a credit card, charge something inexpensive on it each month, and pay it off immediately. For example, if you charge one tank of gas on your credit card each month, write a check (or pay online) to your credit card company as soon as you return home. This helps establish good a credit history and allows you to build a solid financial track record that will help rebuild your credit after filing bankruptcy. Remember, if you don’t pay off your balance each month, you can quickly become overwhelmed with interest, late fees, and penalties and be pushed into another bankruptcy in the future.
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At Adam Gohn, Esq, we are committed to helping you seek relief under the bankruptcy code, and helping you rebuild your finances going forward. If you, or someone you know is considering bankruptcy, call 1(573)979-3183 or click the button below.