Credit Repair After Bankruptcy: Your Options
When it comes to credit repair after bankruptcy you have
essentially three options:
1) Hire a credit repair company
2) Buy credit repair software
3) Do it yourself (free!)
Before we go further, for the purpose of this article "credit
repair" means the removal of any inaccurate or obsolete negative
information from your credit report - not the removal of
accurate non-obsolete negative information from your credit
report.
Okay, now that we've defined "credit repair", let's look at each
of the three credit repair options in more detail:
1) Hire a credit repair agency.
You can hire a credit repair company, which usually costs a few
hundred dollars or more. The advantage here is it saves you some
time.
The downside to hiring a credit repair company is that it can be
expensive as mentioned above, costing a few hundred dollars or
more.
If you do decide to hire a credit repair company, choose one
very carefully. Stay away from credit repair companies promising
to delete accurate non-obsolete negative items from your credit
report.
Why? Because even if the credit repair company gets lucky and
does manage to remove any accurate non-obsolete negative items
from your credit report it may only be temporary - the credit
reporting agencies update their files on a regular basis, so any
accurate non-obsolete negative item that was removed from your
credit report can re-appear again in the future.
While we're on the topic of "non-obsolete" versus "obsolete"
negative information on your credit report, let's look at how
long negative information can remain on your credit report: Most
negative items can remain on your credit report for up to seven
years from the date they were included in your bankruptcy. A
Chapter 7 bankruptcy can remain on your credit report for ten
years from the date it was filed, while a Chapter 13 can remain
on your report for seven years from the date it was filed.
2) Buy credit repair software
There are a number of credit repair software programs on the
market today. This option is typically less expensive than a
credit repair company because you are doing the work. It also
saves you time from having to compose your own letters.
Here's how most credit repair software works: You load it onto
your computer, fill in the blanks with your information, and
then print out the customized dispute letters the software
creates.
The risk you run here is that the credit reporting agency may
not investigate the dispute and respond by saying they believe
your dispute is "frivolous and irrelevant". Why? Because when
they see any sort of form letter they may think you are using a
credit repair company.
3) Do it yourself
This is usually your best option, and it's free. You just need
to know exactly what to do when it comes to credit repair. You
can start by visiting each major credit reporting agency's
website and reading their instructions on how to dispute any
inaccurate or obsolete negative information on your credit
report. The three major credit reporting agencies are: Experian,
Equifax, and Trans Union.
In addition, you can also pick up a book on credit repair. One
word of warning though: Some books and courses encourage you to
do illegal things: For example, creating a "new" identity. Stay
away from these! Others are excellent resources when it comes to
showing you how to remove inaccurate or obsolete negative items
from your credit report.
If you have discharged or dismissed bankruptcy and want to
repair your credit, there are some specific steps you need to
take. I have seen very few credit repair books that even mention
them. In After Bankruptcy Credit Solutions, I go into detail on
each one.
For example, if you are applying for a home loan after
bankruptcy, any inaccurate or obsolete negative information on
your credit report can cost you thousands or tens of thousands
of dollars in extra interest - if it doesn't prevent you from
qualifying for a loan. There is a way that you can get these
negative items on your credit report removed or updated in as
little as 48 hours!
So now you know what options you have when it comes to credit
repair. Bottom line: Doing it yourself is usually the best, and
most inexpensive, option when it comes to credit repair after
bankruptcy. It just takes an investment of time on your part -
but it can be well worth the effort.
Remember, if you have a discharged or dismissed bankruptcy on
your credit report there are some specific steps you need to
take when it comes to credit repair. Keep this in mind if you
choose the "do it yourself" option and plan to shop for a book
on credit repair.
Copyright (c) 2006 Innovative Solutions Publishing, Inc. All
rights reserved.
The company and product/service names referenced in this article
are the trademarks, registered trademarks or service marks of
their respective owners. None of the owners have sponsored or
endorsed this article.
DISCLAIMER:
This information is designed to provide only a general overview
of the subject matter herein.
This information is provided with the understanding that neither
the publisher nor author is engaged in rendering legal,
accounting or other professional advice. If legal or other
expert assistance is required, the services of a professional
should be sought.
Neither the publisher nor author shall be liable for any loss or
damages, including but not limited to special, consequential,
incidental or other damages, caused by the information contained
herein.