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In order to have a good credit score you need a solid payment history. If you have negatives in your credit report, such as late payments, high balances on credit cards, or charge-offs, you may have a hard time obtaining a high (favorable) credit rating. However, simple debt is the major factors in determining a credit score – and after a bankruptcy discharge debt is erased. In order to aid you in rebuilding your credit after a bankruptcy, we will send notice to all three credit bureaus with proof of discharge and a demand that they update your credit data. It normally takes about 4 weeks for the credit reporting agencies to update their files. They will report your bankruptcy by listing each discharged debt as having been discharged in bankruptcy. According to Federal Law, the bureaus have 30 days to update (re-list) your entries from the date of receiving your request. This request is called a dispute and federal law requires them to update your information. If they do not comply with reasonable accuracy and diligence within 30 days, you have a violation of the Fair Credit Reporting Act which can give you leverage in persuading them to report your information accurately. You are also entitled to add a statement describing the circumstances causing you to have to file a bankruptcy, but the effect of this on your credit score is questionable. |
To rebuild a solid payment history, take out a credit card, use it monthly, and pay off the entire balance every month. If you cannot obtain a conventional credit card, then obtain a secured card from your bank (a secured credit card is a card that requires a cash advance to the bank, much like a debit card). You must never be late on a payment again. If you keep current, the creditors will think you have learned your lesson and will treat you more favorably. If you do not, or if you carry high balances, the reaction will be worse than before because they think you have proven yourself to be a high credit risk. Through continued efforts – and staying out of debt by paying each bill on time – you will rebuild your credit. We have seen people rehabilitate and purchase homes with conventional mortgages within a year of filing a bankruptcy. Remember, lenders are in the business of making money on loans, not in the business of punishing people for filing bankruptcy. If they think they can make money by lending you money, then they will lend you money. There is no moral issue here; it is purely financial. After a while, if you live debt free and you are careful, you will find that credit will come to you again. Our goal is to eliminate all the debt we can and to see you live debt free. We want to know what happens after your bankruptcy, so please let us know. |
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