Rebuilding Your Credit after Filing Bankruptcy
Many people try to avoid filing for bankruptcy because of the fear of what it will do to their credit. When someone is in severe financial distress at the place of filing bankruptcy, their credit should not be an issue as it is probably already pretty bad. Rebuilding your credit after bankruptcy filing is possible and there are even some companies online that offer services and tips on how to proceed with do-it-yourself credit repair.
Thinking about Bankruptcy, But Worried About Credit? Talk to an Bankruptcy Attorney for Free
There are many misconceptions about what filing bankruptcy may or may not do to a person’s credit.
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Put the Bankruptcy Filing behind You
After filing for bankruptcy, a person needs to remember what caused the financial problem in the first place that led to bankruptcy. One needs to keep in mind that the old habits of the past have to be replaced with responsible spending habits that will include not living beyond one’s means. The person has to remember to be responsible and never be late with any bills. The first step in financial recovery and repairing your credit is remembering what mistakes were made before and to not make them again. After filing bankruptcy, an individual will need to find ways to reestablish their credit. Finding credit card companies that offer credit to individuals in this situation with a low available balance and a little bit higher interest rate. Remember, because of the bankruptcy filing an individual will have to pay a premium initially to get credit. As credit is reestablished more offers will open up with lower interest rates.
The First Step to Credit Rebuilding after Bankruptcy Is Run a Report
Now that the bankruptcy discharge is behind you, the first step to rebuilding your credit is to obtain a free copy of your credit report from all three major credit bureaus. They are , , & . Each credit bureau is different so it’s important to remember to check and work on all three. A person can file a dispute for credits that is misreported by writing a letter to the Bureau or filling out a dispute form. It’s important to explain any derogatory items on the credit report that are incorrect. It’s also important to make sure to include any documentation that will prove the validity of the dispute. The credit bureau will have 30 days to answer the dispute and if there is no answer from the creditor being disputed, the item will be removed from the report. This process will take some time but it does work to remove negative items and improve one’s credit score.