If you have a bankruptcy that has recently discharged, you are probably wondering
what you need to do to get your finances back on track. One of the most important
things you can do is after bankruptcy
credit repair. Though it may sound overwhelming,
with just a few simple steps your credit can be back on track in no time.
Clean Up Credit Report Errors
The first thing you need to do is request a copy of your
credit report and review
it carefully. There will probably be numerous accounts that were included
in your bankruptcy
that are reporting as open and currently past due.
You will need to
dispute these accounts with each of the three major credit bureaus.
You can dispute either over the internet or via mail. It is a good idea to
dispute through the mail and include documentation that supports your claim that
the account was included in your bankruptcy.
Reestablishing Credit
Once your credit report is cleaned up, it is time to begin reestablishing your credit
history. A secured credit card is the perfect place to start! You will
need to make a small deposit, say $300, with the credit card company. They
will then issue you a credit line against this deposit.
It is important to look for a company that reports your payments to all three credit
bureaus. You also want to steer clear of exorbitant fees that some companies
have. Look for a card that does not have an application fee and whose annual
fee is less than $50.
Once you have a secured credit card, you should go to your bank and inquire about
a CD loan. This is where you open a certificate of deposit with your bank
and they give you an installment loan that is collateralized by this CD. Typically,
you want to ensure that the term of your CD and the term of your loan are the same.
Most banks are willing to make these types of loans because they are fully collateralized
in the event of default! This is a great way to reestablish installment credit
history. Six to nine months after you open your CD loan and your secured credit
card, you should be ready to apply for an unsecured credit card. Look for
companies that specialize in working with people with damaged credit. Believe
it or not, there are quite a few out there! By following these easy steps,
you will be well on your way to credit restoration!