5 Easy Steps to Rebuild Your Credit after Bankruptcy
Bankruptcy often is the last ultimate solution for many
debtors who have unbearable debts. With filing a bankruptcy, you will get rid
of your debts instantly and relief you from the harassing call of your
creditors.
Although bankruptcy has many undesirable consequences such
as your bad credit record will remain on your credit report for 7-10 years, but
with a little work, you can improve your credit even before these negative
records expire. Here are five easy steps you can take to rebuild your credit.
Step 1: Get to know your current credit status
The first step to rebuilding your credit is to look at
exactly where you stand. Order all your three credit reports from those three
national credit bureaus: Trans Union, Equifax, and Experian. You can order
these reports online, it easy and secure.
Print each report and review it closely. Try to understand
the information listed in your credit reports and highlight any negative
records or inaccuracies that are damaging your credit score.
Step 2: Check the expiration dates
By law, your bad credit record will remain in your credit
report for 7 to 10 years, but the exact expiry date might be different among
these 3 reports. Your bad record will still remain at your credit report
although you have pay off your old debts and discharge from bankruptcy.
Look up the exact date of each of bad records including
judgments, liens, charge-offs, late payments, bankruptcy filings, and
collection records. You will likely see a major improvement in your credit score
when these records expire.
Step 3: Request For Correct On Any Inaccurate Records
If you find inaccurate records, fraudulent accounts, or
records that should have expired on you credit reports, you have the right to
send a separate dispute letter to each of the credit bureaus to correct your
Equifax, Experian, and Trans Union records. The bureaus will initial a 30 days
investigation to see whether your requests are valid and if so, they will
correct the inaccuracy in your credit report.
Just one note, don't try to dispute any of the
positive information listed in your credit reports and it is a waste of time to
attempt to dispute these records. Disputing positive information may actually
harm your credit scores.
Step 4: Start to create good credits
Since there is no way to remove your bad record from your
credit report, the best way to improve your credit score is to add good credits
and building up your credit from there. You can easy do this by open up a new
credit card from banks like Orchard Bank (Orchard bank has credit card plan
designed specially to help people rebuild their credit after bankruptcy).
Use this new credit card responsibly and make the monthly
payment timely; with this you are building new history of good credit behavior
on your credit report. Over time, you may want to open additional credit card
accounts or obtain a loan to boost your credit score even higher.
Step 5: Monitor your progress
Subscribe to a credit card monitoring service or get a
credit card monitoring software and use it to track your credit score progress
closely. Your credit score should improve steadily as you continue to use
credit responsibly and add new positive information to your credit reports.
Summary
Bankruptcy does not need to chain you to bad credit for the
next seven to ten years, but you have to be proactive in order to recover and
rebuild your credit.
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