This is Part 2 of 4 of our series on how to increase your credit score after filing for bankruptcy. To read part 1, click here.
Plan your post-bankruptcy credit strategy
You might think you’re a pariah in the eyes of lenders and credit card issuers, but that’s not quite true. You’ll have to prove yourself, of course, but it can be done.
Although your goal — building a good credit score — is the same as that of someone starting from scratch, your situation is a little different. Your problem isn’t that creditors don’t know anything about you, but rather that they know a lot.
1. Assess Your Situation
You can do that by checking your free annual credit reports. These can look daunting, but our guide to reading them can help you decipher what the entries mean. Your credit scores are calculated using information in your credit reports, so any inaccurate negative information can make it even harder for you to dig out of debt. If you find errors, dispute them and get them corrected.
Of course, there will be negative information that is accurate. Your reports will show your bankruptcy for 10 years. Also, late payments and debts that go to collection remain on the reports until seven years after the delinquencies. A Chapter 7 filing wipes out debts, but it doesn’t wipe your credit reports clean.
2. Check Your Credit Score
There are several sources of free VantageScores, and Discover offers free FICO scores even if you are not a cardholder. It’s smart to track your credit score month to month, and it’s crucial to look at the same score each time — otherwise, you’ll get a not-useful apples-to-oranges comparison. Pick one type of score to track and stick with it.
Cleaning up your credit reports and knowing which credit score will be seen by lenders helps you know which credit products to apply for.
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