This article lists the three best services for your credit repair after bankruptcy. In addition to explaining how to repair your credit after bankruptcy, we will also go over how some people have higher FICO Scores after filing bankruptcy.
Credit Repair After Bankruptcy • Starting Your New Life Right
Don’t take our word for it—The Federal Bank in New York and The Federal Bank in Philadelphia did separate research studies. Interestingly, the studies show the majority of people in financial trouble make one of two choices. First, they might live with debt with being overdue. Unfortunately, this decision, in the long run, destroys their credit and the future of their finances. Or, they make the other choice which is filing bankruptcy and repairing the situation. In terms of their credit report, if they file bankruptcy their credit report shows discharged accounts as closed or no comment. Instead, the accounts should not say that the debt is six months past due if the debtor no longer owes the debt. So, it is better for your future credit rating if you file bankruptcy. Plain and simple.
⎆ Immediate drops in your credit score might or might not occur.
It is true that filing bankruptcy may immediately drop a FICO score a few points. But, within a year people who file bankruptcy enjoy much higher FICO scores than people who continue to have overdue or charged-off loans. Normally a person who files bankruptcy is able to buy a car within a few months after discharge and a house within two years.
People that remain in debt continue to never be able to buy a home because their debts are still outstanding. Bankruptcy can be the beginning of financial success by eliminating debt and getting onto a budget. Of course, if you go right back to being in debt you will return to poor credit. But that is a self-inflicted wound.
That facts are, nearly everyone has inaccurate information on their credit report that needs credit repair. After filing bankruptcy you have more inaccurate information than normally. By taking the steps to repair your credit file you give yourself a life after bankruptcy.
So, please remember that just because your bankruptcy is complete doesn’t mean that you are automatically in good financial shape. You get in good financial shape by living on a budget and taking the steps to restore your credit. However, neither of these actions happens automatically. Rather, there are steps to take and follow through to ensure a better credit rating.
Thankfully, almost everyone who repairs their credit is able to buy a car within six months to one year after filing bankruptcy. Additionally, almost everyone who repairs their credit is able to purchase a house within two years after filing bankruptcy.
⎆ Beware of fake credit repair businesses.
There are a lot of scams out there and you should know that you can’t force truthful relevant information of a credit report. But sometimes you can remove even truthful and relevant information if you seriously make efforts. However, truthful items often only temporarily come off.
Most bankruptcy attorneys only file your bankruptcy. At our office, we partner with a couple of services we trust if you want to sweep your credit file after bankruptcy. Credit reporting agencies almost always get the wrong information from lenders or they get no update and correction of the old data. Correcting the information on your own can be frustrating. For instance, even if you sign a reaffirmation agreement, the lender might not report your on-time payments. But, that’s something you can fix with credit repair.
Unfortunately, 40% of the public have incorrectly reported items on their credit bureau report that can disqualify them for a car or home loan. Often an item will be listed as in default after bankruptcy when the correct entry on your credit report should be account closed, current, reaffirmed, transferred, a zero balance, or have no entry at all.
I invite you to open this PDF copy of a credit report to see what your Credit Repair should look like after a bankruptcy.
In our office, we team up with three different companies to make sure you start off your new life with a better credit bureau report. But remember, cleaning up a credit bureau report takes some time. In fact, it takes most individuals about 6–12 months to reach maximum improvement. So, be aware that this process also requires patience.
⎆ Rules that help increase your credit score after filing bankruptcy.
- If you discharge a debt you no longer owe the debt. That decreases the total amount you owe and increases your score. It should no longer be reported as owed or delinquent.
- Repeat examining your credit file. Some debts sneak back into your credit report and you may have to delete them again.
- Stick to your budget and don’t go back into debt. However to establish credit you should have at least a revolving account like a credit card and an installment purchase like a car or home.
- Limit applications for any new debt. Even a small credit application lowers your score.
- Pay bills with automatic bank drafts so you don’t miss a payment.
- Don’t max the credit cards. You want to have a very small balance on them.
⎆ Life after bankruptcy.
Below is a list of services we trust and we do receive even one cent to list them. But please let us know what your experience is with them.
This service is run by CinCompass and they do our intake. It only costs $50 dollars which is a minor cost. They provide reports for you and if an item is untrue, outdated, or misleading you have the right to correct it. Credit Assurance handles the dispute for you but only after let them know you wish to dispute an item. Additionally, this requires you to educate yourself and understand how to report and repair credit.
This service does it all for you but it is the most expensive. You may need to supply them with a credit report at intervals. They review and dispute items for you so you don’t have to know the rules or how it works. Within a year you should reach the maximum that your credit file will improve. This service runs about $100 per month.
This is a do it yourself self-help forum. They have books and a set of forms available for an inexpensive price for the person that wants to do it themselves. However, some forms have to be edited and may not be effective or relevant for Kentucky and Indiana.
If you are thinking about filing bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905