After Bankruptcy 5. – Don’t take shortcuts

Posted on March 1, 2008
Filed Under Advice, Bad Credit, Bankruptcy | 4 Comments

Avoid offers from companies to repair your credit.

They claim that they do such things as “erase your bad credit,” ”create a new credit identity – legally,” or that they can “remove bankruptcies, judgments, liens, and bad loans from your credit file forever.”

Don’t buy it.

“No one can legally remove accurate and timely negative information from a credit report,” says the Federal Trade Commission. “Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.”

There are no shortcuts to rebuilding your credit.

Only time, conscious effort and a strong commitment will do the job.

Here’s how to rebuild your credit after a bankruptcy:

•Develop a spending plan so you can keep track of where your money’s going.

•Trim your spending.

•Use credit as little as possible. Pay it off quickly.

•Use a secured credit card; it’s one of the best ways to rebuild your credit and still keep yourself in line. A secured card requires a cash collateral deposit, which becomes the credit line for that account. For example, if you deposit $500 in the account, your credit line is $500.

•Obtain copies of your credit reports and make sure there isn’t any incorrect information listed.

•Be disciplined with your checking and savings accounts.

by Pamela Yip

Comments

4 Responses to “After Bankruptcy 5. – Don’t take shortcuts”

  1. CCC on June 25th, 2008 7:40 PM

    I’ m just going to throw my hat in the ring and suggest you take the 0% APR. It’ s good to trust our intuition, but hard math makes sense too (and lets remember, we had our intuitions with us when we got in credit card trouble!). I would d…

  2. Howard on June 26th, 2008 8:10 AM

    If you are currently in a Chapter 13 bankruptcy, you will need to contact the Trustee and have him request an order to incur additional debt from the court.

  3. Foxit on August 9th, 2009 11:39 PM

    Wow – Did you see that Transunion went live with FICO 08 in February! Equifax is rolling it out this fall but Experian won\’t say when or even if they are releasing FICO 08.

  4. Fixo on August 13th, 2009 3:10 PM

    “In my opinion one of the biggest problems with our credit crunch and high foreclosure rate is bank reliance on FICO scores. FICO scores do a good job of reporting an individuals past history of repayment of debt. The biggest problem is the scores do wrong.