Filing for bankruptcy will undeniably have a great impact on your credit but sometimes it becomes the only option. It is important to evaluate the budgeting and financial mistakes that helped lead you to this direction. While we realize you didn’t get there on purpose you should self examine your spending habits and start working on ways to rebuild your credit. Yes you heard us right; you can still work on rebuilding your credit even AFTER filing a bankruptcy. But, it will take time and perseverance on your part.
Below are some tips to help you reestablish your credit after filing for bankruptcy.
1. Learn to live within your financial means. Spend your money wisely and do not buy luxury items that are not a necessity for living! This is an important lesson to learn and it will be hard to talk yourself out of some of those luxury purchases but you will thank yourself later.
2. Apply for a secured credit card and be sure to repay on time! This will reflect positively on your credit report and help you to start a new and on time paying credit history. Try not to jump right back in and get a card with a high deposit amount, start out small and progress forward.
3. Open a new checking and/or savings account. Lenders will take this into consideration when determining if you are responsible enough to lend money too.
4. This one can be trick, but see if you have a friend or relative that will cosign on a credit card or small loan with you and then be sure to make all the payments on time. This will help to reestablish good credit and an on time payment history.
5. When applying for new credit, try to start with a gas card or store credit card – these are items you would normally pay for in cash but now you can pay the bill monthly to reestablish credit. This may be a wise choice as to not give yourself extra credit on items you may not need right now!
6. Payday loans should always be a last resort and avoided at all costs if at all possible! The interest rates are extremely high and they can easily become a bad credit trap after all your hard work.
7. Lastly, pay all your credit card and utility bills on time!
These few small tips will help you to reestablish your credit history after surviving your bankruptcy. Don’t give up hope, it is possible but it will take timeFeature Articles, effort and a lot of hard work and determination.
ABOUT THE AUTHOR
Sam Argon is a retired banker who loves to contribute to financial message boards in his spare time. In addition, Sam has written information about www.filingforbankruptcyonline.com - a website offering information and resources for people who are thinking about declaring bankruptcy.
Thursday, May 10, 2007
Credit Repair: The Power of Post Bankruptcy Cleanup
Have you had a bankruptcy discharged? Chances are that you still have derogatory information lingering on your credit report. This is not necessary. Credit repair expert Jim Kemish discusses the benefits of a post-bankruptcy cleanup.
Your Post Bankruptcy Credit Report
Have you had a bankruptcy discharged? If you are like the vast majority of our post-bankruptcy customers you still have damaging derogatory information lingering on your credit report. This is not necessary. Once your bankruptcy is behind you it is time to take action. The law and the credit bureaus (believe it or not) are on your side. Take advantage of the opportunity. An intelligent effort will pay significant dividends.
The Post Bankruptcy Cleanup
Most people don't realize that the derogatory information associated with each of the discharged items can be removed by the credit bureaus upon request. This includes late payments that occurred on the discharged accounts, charge off and collection status notices, and past due balances. This information has an enormous impact on your credit scores. It is your right to have it removed. On the other hand, a public record of your discharged bankruptcy will appear on your report for many years, but has relatively little impact on your credit.
The Life Span of a Bankruptcy
Once you have had a bankruptcy discharged a line item will appear in the Public Records section of your credit report. This single line item will include your filing and discharge dates, and is likely to linger for the full duration allowed by law. This reporting period will vary based on the type of bankruptcy that you elected. The Fair Credit Reporting Act, also known as the FACT Act is the specific law that controls credit reporting (see section 605). The law states that credit reporting agencies must cease reporting of Chapter 7 bankruptcies ten years after the date the bankruptcy case is filed. Chapter 13 bankruptcies are treated differently and must be removed from your credit after 7 years.
The Two Year Effect
This single line item should not concern you! The presence of a bankruptcy on your credit report means little or nothing after two years have elapsed. This might surprise you. Many of the people that we speak to are under the false impression that after a bankruptcy you are destined to have bad credit for many years to come. This should not be the case. If you make the effort to clean up and rebuild your credit after your bankruptcy you should suffer little or no ongoing impact.
Planning for a Mortgage
In the credit repair business we are often contacted by people that would like to get their credit in shape for a potential mortgage application. This is very smart. You do not need any unnecessary derogatory items on your report when you are applying for a mortgage. As a matter of potential interest, Fannie-Mae offers its lowest interest rate mortgage programs to borrowers two years after a bankruptcy discharge (subject to other qualification of course). The real issue that plagues consumers is not the bankruptcy, but the unnecessary lingering derogatory items on the discharged accounts.
Credit Bureaus Can Be Stubborn
In spite of the fact that the credit bureaus are required to comply with a request to remove prior derogatory information they are typically slow to cooperate. A bankruptcy attorney will often submit a request to the bureaus to remove derogatory information. The majority of these requests are ignored or only partially completed. And so, in a terribly large number of cases old information will linger for up to seven years depressing the consumers credit score and making it impossible for them to get credit.
What to Do
Anyone who has attempted credit repair on their own is aware that the experience of dealing with the credit bureaus can be frustrating. An effective post bankruptcy cleanup can be done if you are just a little bit patient. Would you like some advice? I suggest that you keep your communications as terse as possible. Many people succumb to the temptation to tell their story to the credit bureaus. Do not ever, everFree Articles, ever include an explanation of your credit issues.
Minimize Your Communication
The people who work for the credit bureaus and process these requests are allowed to disregard your request if they feel that it is frivolous. I know that there would be nothing frivolous about your personal story. But every single extra bit of information that the clerk has to get through before they get to the essential documentation increases the possibility that you will get thrown in the “frivolous” category. Keep your communication to an absolute minimum. They will appreciate it and you will be rewarded with success.
ABOUT THE AUTHOR
Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida. Power Mortgage Corp was established in 1989 and serves the states of Florida, Georgia, Massachusetts, and Virginia. Jim is also the President of Sky Blue Credit, a national credit repair business. For great credit and mortgage tips visit the Florida Mortgage Blog. You'll be glad you did!
Your Post Bankruptcy Credit Report
Have you had a bankruptcy discharged? If you are like the vast majority of our post-bankruptcy customers you still have damaging derogatory information lingering on your credit report. This is not necessary. Once your bankruptcy is behind you it is time to take action. The law and the credit bureaus (believe it or not) are on your side. Take advantage of the opportunity. An intelligent effort will pay significant dividends.
The Post Bankruptcy Cleanup
Most people don't realize that the derogatory information associated with each of the discharged items can be removed by the credit bureaus upon request. This includes late payments that occurred on the discharged accounts, charge off and collection status notices, and past due balances. This information has an enormous impact on your credit scores. It is your right to have it removed. On the other hand, a public record of your discharged bankruptcy will appear on your report for many years, but has relatively little impact on your credit.
The Life Span of a Bankruptcy
Once you have had a bankruptcy discharged a line item will appear in the Public Records section of your credit report. This single line item will include your filing and discharge dates, and is likely to linger for the full duration allowed by law. This reporting period will vary based on the type of bankruptcy that you elected. The Fair Credit Reporting Act, also known as the FACT Act is the specific law that controls credit reporting (see section 605). The law states that credit reporting agencies must cease reporting of Chapter 7 bankruptcies ten years after the date the bankruptcy case is filed. Chapter 13 bankruptcies are treated differently and must be removed from your credit after 7 years.
The Two Year Effect
This single line item should not concern you! The presence of a bankruptcy on your credit report means little or nothing after two years have elapsed. This might surprise you. Many of the people that we speak to are under the false impression that after a bankruptcy you are destined to have bad credit for many years to come. This should not be the case. If you make the effort to clean up and rebuild your credit after your bankruptcy you should suffer little or no ongoing impact.
Planning for a Mortgage
In the credit repair business we are often contacted by people that would like to get their credit in shape for a potential mortgage application. This is very smart. You do not need any unnecessary derogatory items on your report when you are applying for a mortgage. As a matter of potential interest, Fannie-Mae offers its lowest interest rate mortgage programs to borrowers two years after a bankruptcy discharge (subject to other qualification of course). The real issue that plagues consumers is not the bankruptcy, but the unnecessary lingering derogatory items on the discharged accounts.
Credit Bureaus Can Be Stubborn
In spite of the fact that the credit bureaus are required to comply with a request to remove prior derogatory information they are typically slow to cooperate. A bankruptcy attorney will often submit a request to the bureaus to remove derogatory information. The majority of these requests are ignored or only partially completed. And so, in a terribly large number of cases old information will linger for up to seven years depressing the consumers credit score and making it impossible for them to get credit.
What to Do
Anyone who has attempted credit repair on their own is aware that the experience of dealing with the credit bureaus can be frustrating. An effective post bankruptcy cleanup can be done if you are just a little bit patient. Would you like some advice? I suggest that you keep your communications as terse as possible. Many people succumb to the temptation to tell their story to the credit bureaus. Do not ever, everFree Articles, ever include an explanation of your credit issues.
Minimize Your Communication
The people who work for the credit bureaus and process these requests are allowed to disregard your request if they feel that it is frivolous. I know that there would be nothing frivolous about your personal story. But every single extra bit of information that the clerk has to get through before they get to the essential documentation increases the possibility that you will get thrown in the “frivolous” category. Keep your communication to an absolute minimum. They will appreciate it and you will be rewarded with success.
ABOUT THE AUTHOR
Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida. Power Mortgage Corp was established in 1989 and serves the states of Florida, Georgia, Massachusetts, and Virginia. Jim is also the President of Sky Blue Credit, a national credit repair business. For great credit and mortgage tips visit the Florida Mortgage Blog. You'll be glad you did!
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