How to Repair Credit After Bankruptcy
Filing for bankruptcy basically deals a devastating blow to your credit. Not only will this appear on your credit report for ten years but it could also prevent you from obtaining credit to buy a home and/or other property in the future.
- Request copies of all three of your credit reports. This includes Equifax, Transunion and Experian. You could request and view these reports free online at Annualcreditreport.com. If you wish to view your credit score you are charged a fee and required to sign up for a membership.
- Review each credit report. Report any discrepancies and/or any listings that are not yours to the corresponding credit reporting agency.
- Set up a spreadsheet for all remaining accounts on your reports. List the creditor, the amount and any contact information needed for each creditor.
- Devise a plan to set a payment schedule with each that you are not already paying. Do not exceed your budget as it will place you right back where you started. The key is to pay off these debts completely.
- Contact any creditors who have listed that were not within your bankruptcy that have listings that are older than seven years to have them remove the listing. This does not mean that you do not owe this creditor any money it simply means that they cannot continue to list the account on your credit report. This only applies to closed and/or charged off accounts.
- Review statute of limitations on debts for your state. For example, if you have a charged off loan that has been listed on your credit report longer than seven years you have the right to demand that it is removed. In some states if this debt was charged off for five to seven years and the creditors have not initiated a lawsuit to collect the owed amount for this loan the statute of limitations prevents any further collection attempts. Basically once the statute of limitations is reached you are no longer responsible for the debt.
- Begin rebuilding your credit once all of the listed debts are paid off. Open a savings account with your bank and deposit at least $100 into this account. Allow this money to remain in the savings account for at least three months then continue to the next step.
- Apply for a credit rebuilder loan with your bank. These loans are set up to re-establish credit. However there are certain requirements in order to become approved. These requirements include at least six months of steady employment, direct deposit of paychecks and specific credit score. Your best course of action is to have this loan amount deposited into the savings account from which the loan payments are deducted. Do not remove any of the money from the savings account. Just forget that it is even in the bank. This is a good way to establish credit without going into debt. The initial deposit will take care of the interest on the loan and the principal that was deposited into this account will pay off the remaining balance of the loan. The loan establishes a good credit listing on your credit reports without any late payments. Do not obtain credit elsewhere until this loan is paid off.