Repairing your credit after bankruptcy is possible, you could even obtain a good credit score within several years of your bankruptcy case being discharged. The first step is receiving the notification from the courts that all of your debt has been discharged. This form will be titled “Discharge of Debtor.” Keep this form in a safe place because you may need to show this to creditors as proof your debts are gone.
- Review your credit reports and score closely and clear up any errors. Request your credit report from each of the three major credit agencies. Make sure that all of your debts are listed as “discharged.” Some creditors will not play by the rules. If you notice that some of your debts are not listed as discharged, contact your Bankruptcy Attorney Gregory J. Wald.
- The easiest way to reestablish credit is with a secured credit card. A secured card is a card that is backed by a deposit of cash as collateral. The deposit amount is the amount of credit you will be allotted. Be sure to ask whether the card reports to all three major credit bureaus. If not, find another bank that does so. Typically in 12 to 24 months you will be able to open a more traditional credit card.
- It is good practice to keep your credit card balances below 30% of your credit limit, even if they are paid off in full each month. The lower the balance and the higher the limit, the faster your credit score improves.
- Pay your utility bills and rent on time. This will go a long way in assisting to rebuild your credit. Delinquencies have the largest negative effect on your credit score.
- Get a gas store card. These types of cards can be easier to get than a regular credit card and if you are trying to establish credit history, these small monthly payments can be a great help in boosting your credit score.
By following a few of these steps and by making your monthly payments on time, you will be back on the road to having good credit.
Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Toll Free: 1-866-747-1130