One of the most important things consumers can do after a bankruptcy is check their credit report to make sure their credit information is reported accurately after bankruptcy.
After filing bankruptcy and securing a discharge, you should ensure that all discharged debts appear on your credit report as "included in," or "discharged in bankruptcy" and report a $0 balance. Since creditors and lenders assess your credit risk, this notifies them that the debts were discharged (i.e., you do not owe any money on these accounts).
If the credit bureaus report an outstanding balance on a discharged debt after bankruptcy, or do not indicate that the account was "included in," or "discharged in bankruptcy," you could be denied credit for a loan or mortgage.
It is also important to ensure that the pay status of a discharged debt does not report as charged-off or in collections. This can be confusing and misleading and also lead to the denial of credit.
If your credit report contains errors following bankruptcy, such as by reporting a balance after bankruptcy, you should contact an attorney to help you dispute this error on your credit report. Our attorneys routinely help consumers dispute credit report errors following bankruptcy. Please email firstname.lastname@example.org or call our office at (313) 415-5559.
There are many steps you can take to rebuild your credit after bankruptcy. Some of the easiest ways to rebuild credit after bankruptcy include the following:
Checking your credit report after bankruptcy is essential. If your credit report contains errors, this could hurt your credit and lead to the denial of credit or loans. For example, your credit report after chapter 7 bankruptcy should report discharged debts as closed, and without a balance. Sometimes collection agencies will not update your credit report, or will open new collection account tradelines after your bankruptcy even though the underlying debt was discharged in bankruptcy. Don't wait until your denied credit to take action. Check your credit report 60 days after your bankruptcy discharge to ensure there are no errors or mistakes on your credit report.
A secured credit card is similar to a debit card and can help rebuild your credit after bankruptcy. A secured card requires a cash collateral deposit that becomes the "credit line" for that account. For example, if you put $100 in the account, you can charge up to $100.
A co-signed credit card or loan can help rebuild your credit, but you need to have a friend or family member with good credit history who is willing to co-sign for you.
Being an authorized user on someone else's account can also help you rebuild your credit after bankruptcy. Being an authorized user mean that you are allowed to make purchases with someone else's credit account, but are not personally liable for payment of that account. Being an authorized user can appear on your credit report, and can help rebuild your credit if the primary accountholder makes regular payments and keeps the account in good standing.