After you file bankruptcy, you may find yourself in a pinch when trying to acquire any new debt. The bankruptcy will remain on your credit report for up to 10 years, although some credit bureaus will remove it after 7 years. Either way, you have a few years to work on repairing your credit.
First of all, you will need to pull your credit reports (again) from all three credit bureaus- TransUnion, Equifax, and Experian. You do qualify by law to obtain a credit report from each bureau every 12 months through AnnualCreditReport.com. If you have used your free reports to file the bankruptcy, you may have a few months before you can obtain another one, or you may want to pay for a service that offers all three of your credit reports and at least one of your credit scores. Those services are not free, but they are beneficial if you’re working to raise your scores. At this time we recommend either FreeCreditScore.com or TrueCredit (TransUnion’s monitoring service).
Otherwise, there are instances where you will qualify for an additional free credit report. If you have been denied credit for a loan or credit card because of your credit report, or if you have been denied employment because of your credit report, you qualify for a free copy of your credit report. Additional cases include being unemployed and looking for work, receiving public assistance, or if you believe there are errors from fraudulent activity or identity theft on your credit report.
Once you have your credit reports, go through each account and make sure everything is reported correctly. 30-90% of all credit reports contain some form of error, and if you have filed bankruptcy there’s a good chance one or more errors are on your credit reports.
All accounts included in your bankruptcy must be noted as Included in Bankruptcy with a $0 balance. Make sure all other accounts on your reports are actually your accounts with the proper amounts listed and that all of your information is correct on the report. If you find any inaccuracies, you will need to dispute them with the credit bureau.
There are a couple ways to dispute. If you want, you can dispute with a click of the mouse online. You can also dispute through mail. If you choose to mail your dispute, you will need to send a letter to the bureaus with the inaccuracy along with any supporting information such as statements or receipts. If the account is just not listed as Included in Bankruptcy or with a zero balance, you should attach a copy of the bankruptcy discharge. It is also recommended when mailing disputes to send them certified mail, return receipt requested.
The credit bureau must investigate the disputed information within 30 days. If they find that the information is incorrect on your credit report, they must correct it or remove the inaccuracy, and send you a copy of the corrected credit report. If you request it, they must also send a copy of the report to anyone who has requested it in the past 6 months, and to anyone who has requested it for employment within the last 2 years.
The next step in repairing your credit after a bankruptcy is by acquiring some form of credit. Since you will probably not qualify for many credit cards or loans after filing, you may want to consider a secured credit card. This will give you an opportunity to rebuild your credit, have a credit card for those times that you have to have a credit card (renting cars, reserving rooms, etc.), establish a positive credit history and getting used to managing your credit responsibly.
Secured credit cards typically match an amount that you send in as your credit limit, while holding your money as kind of a security deposit. There are a number of secured credit cards that report to the credit bureaus (which is important in repairing your credit) and are available for low or no fees. There are also prepaid cards that require you to actually use your own money. The problem with prepaid cards though is that they don’t always report to the credit bureaus and include many fees just to carry them.
It does take a bit of time, this is no overnight ordeal. Remember that your credit problems didn’t happen overnight and neither will repairing them. Once you get started repairing your credit, you’ll find it isn’t nearly as difficult as it may have seemed.