Bankruptcy

Your Post-Bankruptcy To-Do List

By guest-writer

If you?ve filed for bankruptcy, you?ve probably already heard a thing or two about how important it is to rebuild your credit. A recent post at CreditBloggers.com provides an excellent guide for how, precisely, a person can begin this daunting process.

Here?s a look at some of the key tips discussed on the post.

Know Where Your Credit Stands

If you haven?t already, now is the time to visit AnnualCreditReport.com and get a free credit report from each of the big three credit reporting bureaus (every American is entitled to one free credit report per year from each bureau). When you get the report:

• Review all the information carefully: Accounts that were discharged in your bankruptcy filing should have a balance of zero dollars and indicate that the debt was forgiven in bankruptcy.
• Look for mistakes: Check for any incorrectly reported information ? this could include a report that you still owe money on an account that was discharged.
• Contest the mistakes so they can be removed: If you notice any incorrectly reported information, contact the credit reporting bureau and identify the problem. You?ll probably be asked to send written documentation that you no longer owe the debt, but the process will be worth it because the less your credit report says you owe, the better off your credit will be.

Start to Make Credit Amends

Once you?ve figured out how your credit looks, it?s time to start engaging in the kind of behavior that will replenish your credit report with positive credit actions and thus make you look like a more attractive credit risk to potential future lenders.

One of the most important things to keep in mind while focusing on rebuilding your credit is to be wary of credit scams ? they abound, and scammers often target people who have recently filed for bankruptcy. Here are some common scams to avoid:

• Advance fee loan scams: This term covers a variety of scams, but for people trying to rebuild after bankruptcy, advance fee scams might involve someone posing as a lender and ?guaranteeing? you a loan ? if you agree to pay a fee in order to have that loan offered to you. If, in fact, you were able to get a loan and make regular payments on it, the loan would likely help you rebuild your credit. But if it?s an advance fee scam, what will likely happen is your loan will never materialize and the fee you pay will be gone forever.
• Credit repair scams: These, too, are sadly common. They involve a company promising to ?repair? or ?wipe out? your credit record ? even if the information on it is completely accurate. Of course, this is not legal to do and will end up costing you money that you?d be better off saving or putting toward real credit-building ventures.
• New credit file scams: This variety of scam involves a company giving you a ?new credit identity? ? essentially, the company gives you an Employee Identification Number (EIN) to use with the credit bureaus in lieu of your Social Security Number. The claim is that you?d get to build credit from a clean slate, but the catch is that this is highly illegal and could lead to jail time and/or hefty fines. Plus, all the time you spend building your ?new? credit identity is time in which your real credit identity just languishes.

Full post as published by The Bankruptcy Blog on December 15, 2010 (boomark / email).