Many consumers today are very conscious about their credit scores. This is because they know that their respective credit ratings directly determine the terms and rates of interest that will be imposed on the financing deals that they might be taking in the future.
These consumers are also well aware of the fact that a bad credit report can significantly reduce their chances of being granted low interest credit programs. They know that having bad credit marks such as tax liens, foreclosure, court judgments and of course bankruptcy can cause lenders to shy away from extending them the financing deals they need.
Let us consider the effect of bankruptcy. A bankruptcy record is usually retained on your credit file for a period of seven to ten years. This means that you will have a very difficult time searching for lenders, willing to provide you credit lines, for a very long time. You will have to wait for a minimum of seven years before your bad credit report will be dropped and before you can receive again offers for low interest credit accounts.
Still, this does not mean that you have to wait that long before you start repairing your credit history. It is possible to gradually rebuild your credit reputation even after your debts have been discharged under bankruptcy. But how can you do this? You will find the answer to this question in the succeeding paragraphs of this article.
Three Tips on Rebuilding Credit History After Bankruptcy
Even if you cannot eliminate bankruptcy from your credit records, you can do things that will help improve your credit score. Below, we have listed three tips that you can employ to do so.
1. Regularly check your credit report. Always obtain a copy of your credit file from the three credit reporting agencies -Experian, Equifax and TransUnion. You can do this by ordering your free annual credit report from Annualcreditreport.com.
Once you have received your credit report, you must carefully check the entries reflected on it. Scrutinize your personal information, as well as your existing credit accounts. In case you find an error or misprint, immediately file a dispute letter with any of the three credit reporting firms. This way, you can prompt them to investigate your credit records and verify your claim. Should they find your claim valid, they will issue you an updated and more reliable credit file.
2. Seek professional assistance. There are many non-profit organizations that provide free credit repair services. By enrolling in these programs you can certainly learn effective tips that you can use to gradually regain your credit reputation. Not only that. Credit repair guides also provide advice on how you can manage your finances as well as your credit accounts responsibly. This way, they can assist you to avoid falling into new debt traps and encountering bigger financial problems in the future.
3. Make a conscious effort to avoid debts. The two tips we have listed above will not work unless you resolve to change your spending habits. So, we encourage you to avoid incurring new debts. Apply the money-management tips that you have learned from your free credit repair sessions. This way, you can succeed in regaining your credit worthiness and in recovering your financial health.
Follow these three tips and for sure you can successfully rebuild credit even after you have filed for bankruptcy.