Once you make it through the Chapter 7 bankruptcy process, one of the first things you want to start focusing on is how to rebuild your credit score. Now that you have your finances altogether, it is important to start rebuilding your credit score. The entire point of going through bankruptcy is to emerge from bankruptcy with a more solid financial future. An improved credit score is a key to your financial future.
#1 The Bankruptcy Will Stay on Your Report
You need to understand the bankruptcy is going to stay on your report. Going through bankruptcy with your bankruptcy attorney is just the first step to a better financial future.
It is not just going to disappear once the court proceedings are over. It will stay on your report for many years to come. It may stay on your report for anywhere from seven to ten years, depending on the exact circumstances behind the bankruptcy and different agency reporting standards.
#2 Discharged Debt Will Go Away
The good news is that all the debt that was discharged during the bankruptcy is going to fall off your credit report. However, it will take some time for the debt to start falling off. Some of it may disappear right away. Other debt may take a few months to take away. However, over the next year, all your bad debt, such as your credit card and car loans, will all disappear from your credit report.
If the debt doesn't discharge, contact your attorney. Your bankruptcy attorney will follow through with each of your creditors and make sure they submit the appropriate information to the credit reporting agencies.
This will not raise your score right away. However, as these items fall away from your credit score, your credit score should improve. Even though you will still have the bankruptcy on your credit report, getting rid of all of that bad debt will cause your credit score to improve.
#3 Get a Secured Credit Card
You need to start building your credit score again. Start rebuilding your credit with a secured credit card.
With a secured credit card, you have to put down the amount of money that represents the lending amount on your card. Your limit will be equal to the deposit on the card. You are essentially putting down collateral on the card.
Try not to build up a balance, and pay your card off each month. This will keep you from incurring interest, and with many programs, after a while, you can transition to a regular credit card and eventually get back the deposit you put down to secure the credit card. This can help you start to build up your credit score again.
After you make it through Chapter 7 bankruptcy, it is time to start rebuilding your credit. It will take a while for the bankruptcy and discharged debt to fall off your credit. Work with your bankruptcy attorney to make sure that all the debts are correctly discharged. It is important to wrap-up your bankruptcy in order to improve your credit score. In the meanwhile, work on building up your credit by paying your bills and obtaining a secured credit card.