Are you looking to rebuild your credit after bankruptcy? Most people who file begin with very good credit and excellent payment histories. However, circumstances change. You deserve a second chance. Bankruptcy offers you an opportunity for a fresh start, and this includes an ability to rebuild your credit.
Rebuilding your credit requires determination and doesn’t happen overnight. If you put in the effort, you can restore the trust of lenders. With this in mind, we recommend the following steps to get started.
Check Your Credit – Review your credit report, and ensure creditors correctly report balances discharged in a bankruptcy. It may take 90 days or so. Given that, send the credit bureaus a dispute if there are errors.
Open an Account – Having a bank account is a sign of financial stability. If you do not have one, it is important to open both a checking and savings account.
Build Savings – Use your bankruptcy as an opportunity to save, and budget 10 percent of your income, but any amount saved is better than nothing. Savings are also important for secured credit.
Secured Credit – Start to rebuild your credit history using secured credit cards and loans. Banks offer credit in exchange for holding an equal amount in a deposit account.
Retail Credit – Many retail store and gas cards have lower credit requirements. You may qualify even with a bankruptcy on your credit report.
Pay Better than Terms – Pay more than the minimum payment for credit cards and pay off loans a few months early, even if there is no discount. Paying better than terms improves credit quickly.
Unsecured Credit – You can start applying for unsecured credit again after a year of on time secured credit payments. It is best to apply at banks you have a relationship with.
Monitor Credit – Keep a close eye on your credit report. Sometimes, accounts included in bankruptcies are accidentally sold to debt buyers who will try to collect. It is important to make sure items on your credit report are correct.
Finally, beware of companies claiming to offer a new credit identity. The U.S. Federal Trade Commission warns, “Companies promising a ‘new credit identity’ say they can help you hide bad credit history or bankruptcy for a fee.” These companies often peddle in stolen Social Security numbers, many times taken from children. Using these services means you are committing identity theft. Rebuild your credit the right way.
Have the professionals guide you out of this horrible event the right way but also the quickest way. With over three decades of experience, HARRIS S. AMMERMAN, is dedicated to serving anyone who is experiencing overwhelming debt and needs to file for bankruptcy relief under Chapter 7, or chapter 13. We are pleased to serve the Washington D.C., Maryland and Virginia areas, call today at (202) 638-0606 for a free consultation. If you would like to talk more about how to rebuild your credit after bankruptcy, or need additional information, please contact us.