The United States Supreme Court has said that the purpose of bankruptcy law is to give “the honest, but unfortunate debtor a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” In other words, filing bankruptcy is a fresh start.
How to begin that fresh start has left many debtors with questions about what to do after their bankruptcy is over.
The debt relief provided by a bankruptcy discharge is real and often the first sense of relief debtors have felt in a long time. With this new sense of relief still comes some questions. We often hear “How do I rebuild my credit score?” While the bankruptcy provided relief from the debt, it does not mean that your credit score gets a reset. Filing bankruptcy in Branson Missouri is simply the first step to credit repair.
After a bankruptcy discharge, the next step in credit repair should be reviewing your credit report. Reviewing your report 60-90 days after your bankruptcy discharge will allow the creditors time to update their reporting and give you a picture of how your past debts are being reported.
Federal law states you are entitled to one free copy of your credit report every twelve months. The three largest credit reporting bureaus (Experian, Equifax, and TransUnion) have established a website for obtaining these reports free of charge. The site AnnualCreditReport.com is the only authorized source to get your free annual credit reports under federal law.
You can request your free report online, by phone, or by mail. Visit AnnualCreditReport.com, call (877) 322-8228, or fill out the Annual Credit Report Request form and mail it to: Annual Credit Report Request Service PO Box 105281 Atlanta, GA 30348-5281. You will have the option to request all three reports at once or to order one report at a time.
Once you have reviewed your credit reports, you should contest any erroneous information. If you find an error in the reporting this will improve your score once it is resolved. Debts that were discharged by the bankruptcy court during your case should be listed on your credit report as “discharged in bankruptcy” or “included in bankruptcy” with a zero balance.
The date of the last activity should be the bankruptcy filing date not the discharge date. This is important as information that ages has less impact on your score and will eventually go away.
All of the credit bureaus have simple instructions for contesting errors on your credit report and this information is provided with the credit reports for your benefit. Once you have reported the mistakes in your credit report, the reporting bureau is required to send you an updated credit report.
Review this new credit report closely and report any new or remaining errors. It is important to remember your credit report is only as good as the information the credit reporting bureau receives from the creditor. We all have a responsibility to ensure our credit history is accurate.
Once your credit report is correct, you should see an increase in the score. It is important to monitor your credit reports periodically to watch for any new errors and to keep the reports accurate.
A correct credit report will reflect an accurate credit score. This credit score is a number that lenders use to estimate risk and is made up of several aspects of your credit history and usage. In very general terms approximately one third of your credit report is based on credit history, one third is based on available credit, and the last third is based on various other things like the types of credit and lengths of credit history. The best way to rebuild your credit score is to start positive credit reporting and establish a history of responsible credit use.
Rebuilding your credit history requires diligence and patience. Filing bankruptcy is often the fresh start needed to launch that process.