If you are finding it difficult to obtain credit because of a poor credit history, collection accounts or bankruptcy, there are steps you can take to rebuild your credit history and, over time, improve your credit score.
The first thing you should do is request a copy of your credit report to determine that everything listed on it is correct. According to the Federal Trade Commission, you are entitled to a free copy of your credit report from "each of the nationwide credit reporting companies-Equifax, Experian, and TransUnion," every year.
It is important to be sure that there are no accounts that are incorrectly reported as delinquent on your credit report, and that there are no accounts reported that are not yours. You should also make sure that any debts that were discharged in bankruptcy are listed as such on the report and that all of the debts that were included in bankruptcy show a zero balance.
Second, make sure to pay all of the other debts you owe on time. These include loans, mortgage or rent payments, utilities, etc., as these can be reported to the credit bureau as delinquent and negatively impact your score even more.
The third step you should take is to try to pay off any other debt to reduce the total amount that you owe. If you have filed bankruptcy and have other debts that were not included in the bankruptcy, reducing that other debt can help improve your score.
Fourth, while it is smart to only apply for credit you really need, obtaining a credit card, even a higher interest one, may help you improve your credit after a bankruptcy if you pay the card on time and pay off the balance each month. This is one key way to improve your credit history.
Keep in mind that rebuilding credit takes time. Accounts that are reported delinquent take seven years to come off a credit report, while bankruptcies will stay on the report for around 10 years. As time passes, if you are responsible with your credit, your credit score will eventually improve. If you have questions regarding rebuilding credit after a bankruptcy, consult with an attorney knowledgeable in credit restoration matters to discuss your situations and help you determine what steps you should take to rebuild your credit.
