While bankruptcy can rescue filers from the depths of financial despair, life after bankruptcy may seem a bit daunting, especially right after your case is dismissed. The biggest concern for most filers is their credit scores, which do take a temporary hit following a bankruptcy case. But with some careful planning, a bit of discipline, and a positive attitude, filers can start to improve their credit scores immediately after leaving bankruptcy court.
Bankruptcy’s Effect on Your Credit:
While bankruptcy does appear on filers’ credit scores, most people who file for bankruptcy already have shaky scores. And by filing for bankruptcy, consumers may be able to shed the debt that kept them from improving their credit scores in the first place. Still, a Chapter7 bankruptcy filing will remain on your credit report for 10 years, while a Chapter 13 bankruptcy usually lasts for 7 years. Fortunately, you can improve your credit score at a rapid pace as soon as you walk out the door of the bankruptcy court.
Improving Your Credit After Bankruptcy:
In order to improve your credit score, there are a few key steps you should take after finishing your bankruptcy case:
To track the progress of your credit score, you can obtain a free credit report from each of the three major credit bureaus, Equifax, Experian, and TransUnion, every year. And check your credit report regularly, as the reporting agencies make errors at an alarming rate.
Beware of Credit Repair Scams:
Sadly, scam artists are fond of those looking to repair their credit scores. There are a few warning signs that credit repair offers may not be what they seem. First, beware of companies that require you to pay a fee before you receive any aid. Second, if the company refuses to inform you of your legal rights, head in the opposite direction as fast as you can. Also, if the credit repair company asks you not to contact the credit bureaus directly, or try to convince you to do something illegal, it might be a scam.