subject: Credit Repair - Three Steps To Fast Credit After Bankruptcy [print this page] If you've had the unfortunate circumstances of having to file a bankruptcy, you're not alone. With consumer confidence at an all time low, and record number unemployment and foreclosures, more Americans are seeking federal protection for relief from their creditors. Current statistics report an average of 5,593 filings a day.
Damaged FICO Score
Filing chapter 7 or 13 can drops your score by as much as 100 to 150 points and remain on your history for up to 10 years. Initially you'll encounter difficulties qualifying for loans and renting an apartment. Most creditors and landlords prefer to wait two years after your bankruptcy before extending credit. You might think you'll never be able to qualify for a home loan or low interest charge card.
But there's good news! Long before a chapter 7 or 13 drops off your record, you can build a great FICO score with three important credit repair techniques. Let's examine these three essential steps:
1) Clean Up Your File
Get a copy of your file from the three major bureaus. If you find inaccuracies, file a dispute with the bureau to have it removed. The Fair Credit Reporting Act requires a credit bureau to delete incorrect or incomplete information on your file within 30 days if not verified by the creditor.
2) Get a Secured Card
One of the best tools to help you build a positive payment history is a secured card. These cards are designed for people with financial issues. To get one, you simply deposit money into a blocked bank account to guarantee your card. Your limit is usually set at 50-120% of your deposit amount. With responsible use of this card, you can qualify for an unsecured card over time.
3) Get an Installment Loan
The final step is to find a local bank or credit union willing to give you a small installment loan. You want to keep the terms of the loan short from one to two years. The goal is to pay the minimum amount of interest necessary while you build a new pattern of paying. You may be required to deposit money to guarantee the loan or find a co-signer to guarantee it.
Taking these three essential credit repair steps immediately after your bankruptcy will give your FICO score a quick boost. With timely payments, you will be able to qualify for low interest cards and loans again.
