Many people find themselves in financial situations that are difficult or impossible to resolve. Often, bankruptcy is the only solution. You can repair bankruptcy damage to your credit report, but nothing works better than time. If you are contemplating filing bankruptcy, there are things you can do initially to mitigate the damage, making it easier to repair bankruptcy once you have filed. If you can afford to exclude a home from bankruptcy and continue to make the payments until the home can be sold, this will help ensure that you are able to buy a home before the bankruptcy stops appearing on your credit report.
Bankruptcy appears on your credit report for up to ten years; repairing bankruptcy damage to your report does not have to take that long. There are many options you have for repairing bankruptcy. While not always the most practical, repaying some of the debt can help. Even more important is establishing new credit as soon as the bankruptcy is discharged. That may seem like an impossible task, particularly in the current economic climate where credit has been curtailed for even the best credit risks, but even small, prepaid credit accounts are a smart way to begin to repair bankruptcy damage.
Equifax
After your bankruptcy is discharged (allow at least 60 days for the reporting to catch up), you should request copies of your credit report from all three credit reporting agencies (Experian, Equifax, and TransUnion). Go through the report line by line and make sure that every debt that was included in your bankruptcy is being reported with a "0" balance and is noted as included in bankruptcy. By doing this, you ensure that only the bankruptcy counts against you and not, in addition to the discharged bankruptcy, each individual credit card debt.
As you work to repair bankruptcy damage to your credit report, make sure you set up a budget that allows you to pay bills on time with ease. Use a credit card to make a purchase to help reestablish your credit, but have the money for the debt set aside. When the bill comes, pay more than the minimum amount and pay it well before the due date. Establish lasting credit management habits, and don't allow yourself to get in over your head. With time and effort, you can repair bankruptcy damage to your credit report and have access to needed credit within 12 - 18 months after your bankruptcy is discharged.
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