Just filed Ch 7 with 97,000 debt, so when can I start rebuilding credit?

There are several steps you can take to help improve your credit rating, but building and maintaining a good credit score requires diligent effort and a long-term commitment to financially sound living. In the process, you can also work to repay the debts that you did not include when you filed bankruptcy.

First, you should obtain a copy of your credit report from each of the three major credit bureausâ€“Experian, Equifax, and Transunion. You can request free copies of your reports by visiting http://www.annualcreditreport.com

Once you have received copies of your reports, you should carefully review them to make sure that all listings, especially the listings appearing in the â€œderogatoryâ€ category, belong to you and are being reported accurately. Credit reports are notoriously inaccurate, with consumers frequently finding listings of derogatory accounts that never belonged to them or that were paid off years ago. If you find any inaccurate listings, you should dispute them with the appropriate credit bureau. The Federal Trade Commission provides a comprehensive guide to disputing items on your credit report, available at www.ftc.gov

Clearing up inaccurate derogatory accounts may significantly improve your credit score, depending on the number of inaccurate listings you find on your reports.

Next, you should try to pay off any derogatory items that legitimately belong to you. While paying off these accounts will not make them fall of your report, it should improve your credit by reducing the amount of delinquent debt reporting to the bureaus and preventing the accounts from continuing to be reported as delinquent. Contact your creditors to discuss different repayment options available to you, such as monthly payments or settlement.

In order to rebuild your credit score after a bankruptcy filing, you will also need to start establishing new credit accounts and making timely payment to build a positive payment history. Your payment history accounts for approximately 35% of your credit score, so creating a new payment record is essential to rebuilding your credit score after bankruptcy. Since many credit card companies will not extend credit to people who have recently filed bankruptcy, a good option to consider is a secured credit card. Secured credit cards require you to deposit cash in an account with the credit card bank and the credit line available on the card is equal to the amount of cash you have on deposit. This may sound strange; why would you not just spend your own cash? However, these secured credit cards report timely payments to the credit bureaus each month and should help you reestablish your payment history. Also, small credit accounts, such as gas cards, can be a good option to build credit, but you should make sure that you pay off your balance each month to avoid finance charges and to prevent yourself from starting down the spiral of debt again.

The more time that passes, the less negative impact your bankruptcy filing will have on your credit score. However, to build a positive credit rating you will need to counterbalance the negative impact of the bankruptcy with positive listings on your credit reports as mentioned above. As time passes, the positive impact of your new accounts will become stronger while the negative impact of your bankruptcy should become weaker, thus allowing you to slowly rebuild your credit score.

To learn more about credit scoring, check out the Bills.com Credit Score Information page at http://www.bills.com/credit-score.