As you may already know, Chapters 7, 11, and 12 will remain on the credit report for ten years from the filing date. A Chapter 13 bankruptcy is reported for seven years from the filing date. Accounts included in bankruptcy will remain for seven years from the date they are reported as included in bankruptcy. Your ability to restore your credit after filing for bankruptcy is better now than ever. Once your bankruptcy is settled, you will begin to receive a host of offers to finance homes, vehicles, and credit cards.
Here are some of the next steps you should take:
1. Examine your credit report – The first thing to do is obtain a copy of your credit reports and make sure there are no errors or inaccuracies in your report.
2. Pay your bills on time, every time – Pay your bills and rent on time all the time. Remember that your payment history is 35% of your credit score.
3. Bank account: start with a checking or savings account. Lenders can use this to determine if you are currently financially responsible.
4. Build with store credit: Apply for store credit cards or gas card. Use it for items that you would normally pay cash for, this way you keep your monthly balances within reason, making it easy to pay each month.
5. Secured Credit Cards – Apply for a secured card where you can deposit cash and make charges. Pay down advances for two months so they show up as positive marks on your credit report.
6. Friends or Relatives: Find a friend or relative who is willing to co-sign a loan or add it to your credit file.
7. Find the Right Lenders – Look for lenders who are more likely to consider helping you even in the event of bankruptcy.
8. Buying a car: If you buy a car, make sure it is a used car so it is not affected by the depreciation that occurs during the first two years of buying a new car.
9. Stay away from payday loans: Payday loans that have high interest rates are a “bad credit” trap.
10. Be proactive – Often, write a letter to each of the credit bureaus explaining the circumstances that initially led you to file for bankruptcy.
One of the most important lessons to learn when dealing with the challenges of bankruptcy is to be patient. Understand that the road to bankruptcy did not happen overnight. And neither will the way to improve your credit. By following the tips above, the path to a better credit rating is very possible. By adhering to these 10 tips, you can improve your credit score and improve your life.