November 19, 2015
Many clients come to see us concerned about fixing their credit, or with fears that bankruptcy will destroy their ability to get a car loan, a mortgage, rent an apartment, or insurance. When it comes to credit repair, there is no secret formula to make all your previous debts disappear, and suddenly show a nice, clean credit report. That being said, there are some important considerations in how to improve your credit score, and some significant pitfalls to avoid.
First, pay your bills on time. Whether you have gone through a bankruptcy, or are just trying to improve your credit score, one of the biggest things you can do to increase your credit score is to keep the accounts that are reporting to the credit bureaus current. Deficiencies will quickly damage your credit score, and need to be avoided. If you have a mortgage, car payment, or other open credit accounts, paying those on time will help rebuild your credit after an economic struggle.
Second, avoid incurring significant additional debt. Many people assume that the way to fix their credit score is to go out and get some credit cards. Building up debt in an effort to increase a credit score is more likely to create issues because of the debt than to make any measurable improvement. If you feel the need to get a credit card to have something reporting to the credit bureau, consider getting a secured credit card so that you are not going into the hole to show that you are utilizing credit.
Finally, avoid paying for a credit repair service. Most such organizations are simply doing exactly the same things you can do for yourself, and are charging you significant fees for the service. You should review your credit report, dispute any items that appear to be erroneous in writing, and continue to monitor your credit report for signs of fraud. The websites for the credit bureaus has information on this process, and it is relatively simple.
Even with a bankruptcy, a few basic steps can put you on the path to repairing your credit. The first key is getting a solid foundation, which may require the fresh start offered by the bankruptcy process. Get a consultation with an experienced attorney to determine the best path to dealing with your debts and rebuilding your credit score.
Michael A. Spencer, Esq.