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Does bankruptcy ruin your credit forever? The short answer is no. The bankruptcy will be reported on your credit report for up to ten years. In cases where you have great credit before bankruptcy, the bankruptcy will probably negatively affect your credit score. However, in situations where your credit is already caput before bankruptcy, the bankruptcy may even improve your credit score. In order to take advantage of your fresh start and start rebuilding your credit as soon possible after bankruptcy, consider doing the following after your discharge:
1. Order your credit reports
The first step after receiving your bankruptcy discharge is to order your credit reports from the three major credit bureaus. We suggest you wait a few months after the discharge is entered to order your credit reports. This will allow time for the credit reports to reflect the bankruptcy. By law, you're permitted one free credit report each year from every credit bureau. You can access your free annual credit reports online at AnnualCreditReport.c​om.
2. Check your credit reports for errors and dispute any errors
Review your credit reports and make sure every debt included in your bankruptcy is listed as discharged and not delinquent on your credit reports. Also, check your credit reports for mistakes, such as accounts that are not yours and closed accounts showing an open status. If you find mistakes, dispute them with the credit bureaus. The disputes can all be done and monitored online.
3. Pay your bills on time
Your payment history makes up a good chunk of your credit score. So, be sure to pay your bills by or before the due date each month. We suggest you pay a week or more early to ensure your payment arrives on time.
4. Open a secured credit card
A good way to start re-building your credit after bankruptcy is with a secured credit card. A secured credit card allows you a credit limit up to an amount you have deposited with a bank. If you don't make the card payments, you lose the money you have deposited with the bank. Here are things to consider before you sign up for a secured credit card:
- Ask the bank when you can you increase the limit on the card. The higher the limit and the lower the balance on the card, the faster your credit score will increase.
- Ask the bank whether it is willing to eventually offer you an unsecured card. You should work with a bank that will eventually give you an unsecured credit card. Some banks will want to see at least 12 to 24 months of good payment history before offering you an unsecured card.
5. Upgrade to an unsecured credit card
If you have successfully handled a secured credit card for more than 12 months, consider asking your bank to switch you over to an unsecured credit card. Keep the same mentality you had with the secured credit card.
If you are struggling with debt, real estate, or business-related issues, don't hesitate to contact us for help. We offer free initial consultations in consumer bankruptcy matters. Please visit our homepage http://www.olgazlotniklaw.com/ for more information about Law Office of Olga Zlotnik or connect with us via Facebook and Google+.