Putting a Clean Sweep on your credit after Bankruptcy
So you decided to push the nuclear button and declare bankruptcy. Thousands of Americans choose this option every year when they feel they have no other way to deal with their debt. We all know that the bankruptcy stays on your credit report for seven years after you declare, but what can you do to get your credit in tip-top shape in the meantime? Here is a primer for those looking to recover their credit.
The first thing you should do is request a copy of your credit report from the four major credit reporting agencies. You have the legal right to request one free copy of your credit report once per year. Once you have the report, make sure you go over it with a fine toothed comb. You need to check that all of your debt that was discharged from your bankruptcy really is gone and that it has been reported accurately to your credit bureau. If you are having trouble understanding or breaking down your credit report, it is worth the money to go see a lawyer or a professional accountant who can decipher it for you. If you feel that there are inaccuracies on your report, and its far more common than you think, file a dispute. You also have the legal right to protest and fight any entry on your credit report. Again, if you feel you need some guidance, seek the advice of a financial professional.
You can essentially hire a lawyer to just give you advice to walk you though the appeal process, or, if you want, you can hire a lawyer to do all the work for you. Obviously, one option is affordable and one is expensive, but if you have the cash, it might be worth it to have a professional who is experienced in dealing with credit bureaus to help you.
The next step is going to seem like de ja vu. When you first started to build your credit, you had to sign on to some pretty lousy credit cards. You might have had a secured card that required you to send in the cash equivalent of the credit limit so you could use it, or you had a student card that had a very low credit limit and an interest rate around or even above 20 percent. Well, welcome to the past. Those are exactly the kinds of credit card offers you are going to get now, and while it may not seem too appetizing to get one of those cards again, it is absolutely vital that you accept one and use it responsibly. It is the quickest and easiest ways to get your credit back in shape. But there are some signs to watch out for. Many sub-prime cards (cards offered to people with poor credit) come with outrageous fees. Some cards have extremely low credit limits and then very high fees, which result in cards that are practically useless. You want to avoid these kinds of cards. After a few years, you will begin to get better card offers and even if you get one that isn’t ideal, you should take it and use it, just use it responsibly. Getting out of bankruptcy isn’t any fun, but you can do it smartly and you will be back in good credit graces sooner than you think.