Many people who file for bankruptcy are afraid of what could happen to their credit reports. You have a credit report on file with the three credit reporting agencies (CRAs), Equifax, TransUnion and Experian. The information on your credit report is compiled into a FICO credit score, which is used by most lenders. After a bankruptcy, it is likely that your credit score has taken a hit regardless of your filing status. However, the good news is that your credit score is not permanent. You can begin repairing your credit during or after your bankruptcy. Steps to repair your credit after bankruptcy may include:
- Pulling your credit report: To get an idea of what needs to be repaired, you will have to pull your three credit reports from Equifax, TransUnion and Experian. You can receive one free credit report from each agency once per year. The three CRAs operate annualcreditreport.com, a website that allows you to pull these three reports.
- Plan your strategy: Once you have your reports, you can begin planning a strategy to repair your credit. If there are any errors or incorrect information on your report, you can contest them with the agencies or lenders.
- Show financial stability: One of the best ways to repair your credit is to show financial stability. If you still have debts that were not discharged during bankruptcy, you can continue to make timely payments. For example, student loans are generally not discharged during bankruptcy. You can make on-time student loan payments each month to help rebuild your credit. Some people may recommend getting a secured credit card, which requires a security deposit. For some individuals, taking on more debt shortly after a bankruptcy can be risky.
How Long Does It Take to Rebuild Credit?
Rebuilding credit may take time, but it is possible if you remain dedicated. The amount of time it takes to rebuild your credit depends on your individual situation. Keeping the same job, living situation and making on-time payments can show future creditors that you are financially stable. You may notice your credit score begins to improve over time.
The Manalapan bankruptcy lawyers at Garland & Mason, L.L.C can help you discover possible solutions for debt relief and managing your finances.