Rebuild Your Credit After Bankruptcy

By Harvey L. Cox

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.

Clean Up 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 contain any of your pre-bankruptcy debts. According to federal law, you can request a free copy of your credit report at least once a year. Contact the three major credit reporting agencies, TransUnion, Equifax and Experian, to ask for 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 Information on Your Credit Report

One of the quickest and simplest ways to rebuild credit after bankruptcy is to apply for a secured credit card. A secured credit card is backed by money that you deposit into an account. If you fail to make your payments, the creditor takes the money out of the account to pay the amount you owe. Because payment is guaranteed, these types of cards are very easy to obtain. And, nearly all of them report to the credit bureaus. Usually, after 6-12 months of on-time 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 solid means to rebuild credit after bankruptcy. Most rent to own centers will approve an account for you if you have the income to repay the loan. The drawback to opening one of these accounts is that you’ll pay a much higher price for an item than if bought it outright. The overall hike in 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 conventional credit.

You Can Successfully Rebuild Your Credit After Bankruptcy

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.

For more informative tips on rebuilding your credit after bankruptcy go to The Bankruptcy Law Info Center.

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