Five Easy Steps To Rebuild Your Credit

Posted: June 18, 2020 at 10:10 am

Bankruptcy often is the last solution for many debtors who have unbearable debts. When filing a bankruptcy, you will get rid of your debts instantly and relief from creditors.

Bankruptcy has many undesirable consequences though, including the fact that a bad credit record will remain on your credit report for 7-10 years. With a little work however, you can improve your credit even before these negative records expire. Here are five easy steps you can take to rebuild your credit.

Step 1: Get To Know Your Current Credit Status

The first step to rebuilding your credit is to find out your current credit status. To do so, order all three credit reports from the three National credit bureaus: TransUnion, Equifax, and Experian. You can order these reports online, it’s easy and secure.

Print each report and review it closely. Try to understand the information listed in your credit reports and highlight any negative records or inaccuracies that could be damaging to your credit score.

Step 2: Check The Expiration Dates

Your bad credit record will remain in your credit report for 7 to 10 years, but the exact expiration date might be different among the 3 reports. Look up the exact date of each bad record including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records. You will likely see a major improvement in your credit score when these records expire.

Step 3: Request Correction Of Any Inaccurate Records

If you find inaccurate records, fraudulent accounts, or records that should have expired on your credit reports, you have the right to send a dispute letter to each of the credit bureaus to correct their records. The bureaus will initiate a 30 day investigation to see whether your requests are valid, and if so will correct the inaccuracy in your credit report. they may request a copy of your bankruptcy discharge and/or a complete copy of your bankruptcy papers.

Step 4: Start To Create Good Credit

Since there is no way to remove all of the bad records from your credit report, the best way to improve your credit score is to open a new credit card so you can start to add good credit. Use this new credit card responsibly and make the monthly payments on time; this will help build a foundation of of good credit behavior on your credit report. Over time, you may want to open additional credit card accounts or obtain a loan to boost your credit score even higher.

Step 5: Monitor Your Progress

Subscribe to a credit card monitoring service or get a credit card monitoring software and use it to track your credit score progress closely. Your credit score should improve steadily as you continue to use credit responsibly and add new positive information to your credit reports.

Bankruptcy does not need to chain you to bad credit for the next seven to ten years, but you have to be proactive in order to rebuild your credit.