Building Your Credit Score After Bankruptcy: What US Legal System Says
Bankruptcy is a state when a person or more suitably a debtor becomes unable to pay the amount owed to his creditor and declares himself bankrupt which is completely allowed and a legal one but mostly in welfare states only. A creditor can also be declared a debtor through court after following the complete process of law. Bankruptcy exonerates a debtor from most of his responsibilities relating to the repayment of debt.
A credit score normally contains digits that aim to rate the credibility of the debtor’s capacity to repay the debt. A credit score is mostly issued by the credit bureaus and it is a part of the credit report.
RELEVANT LEGAL PROVISIONS.
Laws relating to bankruptcy started to take shape way back in 1898 when the first law relating to bankruptcy also called the “Nelson act” was introduced. The current Bankruptcy Code “Title 11 of the United States Code” was enacted in 1978 by the Bankruptcy Reform Act of 1978 and generally came into force on October 1, 1979. The present code entirely substituted the past Bankruptcy Act, the “Chandler Act” of 1938. The Chandler Act gave the authority to the Securities and Exchange Commission to administer bankruptcy filings. The present code has been revised numerous times since 1978.
BUILDING CREDIT SCORE AFTER BANKRUPTCY.
To gain a credit score after bankruptcy is not as hard as one thought it would be. It is an admitted fact that bankruptcy stays on credit reports for a prescribed period of time and that time have been written in relevant laws. The dedicated time period normally ranges between 7-10 years and it strictly depends upon the nature of filing the bankruptcy. However, one can improve his credit score in more than one way:
Making payments at the time and responsible and prudent use of a secured card or loan can be of great help in getting credit scores better after filing for bankruptcy.
- Scrutiny of Credit Reports
One should be checking credit reports regularly to rule out the possibility of any incorrect account information or inaccurate public records which may be holding down the credit scores of a person.
- Scrutiny of Credit Scores
Timely checking of credit score can be of great help in building a good credit score.
- Becoming an authorized user.
By asking someone to allow you to be an authorized user of their credit card can help in rebuilding your credit score.
- Finding a perfect co-signer.
Finding and requesting someone who has a sound and stable financial position can also help you rebuild your credit scores.
- Getting a secured credit card
Once you have declared bankrupt then getting a secure credit card is a perfect product for you as you have to build your credit from scratch.
- Attaining a Credit-Builder or a secured loan
As it is evident from the name this type of loan will help you build your credit score. However, you have to comply with the conditions of the institution offering you a credit builder loan. as your payments to the institution are reported the credit bureaus and non-compliance may badly affect your credit reports and scores.
Once you have gone bankrupt there is no shortcut through which you can gain your creditworthiness as you had before being declared bankrupt. scoring a good or great credit score takes some reasonable time. By acting upon the credit building scores techniques mentioned earlier you may gain knowledge about what’s going on in your credit reports and scores and the same can help you in gaining a good credit score only within a few years of filing for bankruptcy.