In 2013 there were over a million bankruptcies filed in the US. So, while the median credit score is over 700, there are a lot of people who have been forced into filing bankruptcy, severely damaging their credit score.
Ways to Repair Your Credit Following a Bankruptcy
There’s no sugar-coating the situation and it’s understandable to be concerned. It is better that you be concerned about the situation that you’ve found yourself in, rather than being apathetic. Many people who have gone through a bankruptcy have chosen to accept their fate and tend to avoid credit situations or even checking their credit score. However, there are ways to repair your credit score after a bankruptcy, but you must be proactive about the situation if you want to get your credit score back on track – and it won’t take as long as you might think if you are proactive in taking control of your credit.
Where to Start After Filing for Bankruptcy
While many consumers, after filing bankruptcy, avoid new credit at all costs due to the fear of repeating past mistakes, it’s crucial to your credit restoration success that you begin rebuilding your credit by opening a secured credit card, retail or gas card, or purchasing a new vehicle – if your previous vehicle was relinquished during the bankruptcy.
Once you’ve acquired some form of credit (e.g. secured credit card, retail/gas card, car loan, ect..), make sure that you make your payments on time every month, possibly by setting up online bill pay through your checking account, and make sure that you use your new credit card every month while also paying it off each time. Many people find it helpful to use their new credit card on a typical, small monthly bill like a phone or electric bill and pay off the credit card shortly after.
Should you have filed your vehicle or car loan into your bankruptcy, you will likely be able to apply for a new car loan fairly easily, albeit at a high interest rate. You should definitely ensure that if you purchase a new vehicle that the monthly payments will not cause you financial burden and that the creditor will, in fact, report the loan to all 3 credit bureaus. Making a monthly payment on a car loan will help to rebuild your credit after a bankruptcy and will show that you are being financially responsible.
Check Your Credit Report for Errors
While rebuilding your credit after a bankruptcy can be slow and tedious and requires a ridiculous amount of patience and dedication, you may also be able to speed up your credit repair by disputing negative items on your credit report. You can request a copy of your credit report once each year from each credit bureau and reviewing your credit report following a bankruptcy can be a vital part of your credit recovery following a bankruptcy.
Once you’ve received a copy of your credit report, review it for discrepancies or errors. If you find errors in your credit report, you can dispute the negative listings and potentially have them removed from your credit report. If, for instance, your credit report is showing that you were late on a credit card payment in the past but you’re able to prove that you weren’t, you may be able to dispute that record and have it removed from your credit report, thereby helping to improve your credit score much quicker. In some cases even a bankruptcy can be removed from your report if errors in the details are discovered and the item is disputed. For more information or assistance with credit report disputes, contact Credit Absolute today!