Secrets for Rebuilding Your Credit After Filing Bankruptcy
You would not be alone if you had a lot of questions about how to rebuild your credit after filing for bankruptcy. While bankruptcy sometimes cannot be avoided, you can and should be concerned about what you can do to improve your credit score after filing.
As you may know, most lenders use your credit score or credit profile to decide whether or not to extend credit to you. In the past, a loan officer would personally review your credit report when deciding about whether to extend credit. In recent years however, both the credit bureaus and lenders have relied more on something called your “credit score” to decide whether to extend credit and at what rates.
Your Credit Score and Bankruptcy
The credit bureaus calculate your credit score by giving a number value to the various positive and negative elements on your credit report. Each of the three major credit bureaus has its own secret formulas, but generally, you can expect your credit score to range between 300 and 850. A credit score over 800 is excellent, a score over 750 is very good, a score over 700 is acceptable and scores below 600 will result in credit denials or high rates.
As you might imagine, your bankruptcy will damage your credit score - although not as much as you might imagine. It appears that the recency of your bankruptcy may be a factor - therefore the damage caused by your bankruptcy right after filing is worse than the damage six or eight months later. If your bankruptcy eliminates debts, it can also improve your debt to income ratios. The bottom line: in many cases you can restore your credit after bankruptcy, sometimes in as little as 8 to 12 months.
In this section, we show you how to obtain copies of your credit reports (for free), how to challenge derogatory(damaging) entries, and the steps you can take to buy a house or a car after filing either Chapter 7 or Chapter 13.
- How to obtain your credit reports
- How to challenge a derogatory entry
- Mistakes to avoid going forward
- Specific steps to rebuild
- Buying a house during a Chapter 13
- Buying a car during a Chapter 13
- Buying a house after Chapter 7
- Buying a house after Chapter 13
- Buying a car after Chapter 7
- Buying a car after Chapter 13