Debt troubles can extend far beyond a dwindling checking account and bills piling up. Often your credit report is the first place to take a hit when payments are missed and accounts become delinquent. After a debt negotiation, settlement or bankruptcy has been completed many people are left with the task of rebuilding their credit to start over. This is no easy task, but can be done by following a few simple tips:
Credit Report Activity
After exiting bankruptcy or completing a debt negotiation deal, not all creditors will update credit report information right away. As a consumer, you have the right for your credit report to reflect the most accurate and up to date information. You may have to request to have your creditor report any changes to the credit bureau. Stay in constant review of your credit report for at least the next 12 months after resolving debts to ensure everything is accurate.
Attend Credit Counseling
If you haven’t already taken a credit counseling course, it is a good idea to do so. While they may be required for bankruptcy filers, they can provide an array of financial services that can benefit anyone looking to boost their money management skills. Credit counseling agencies can offer information on topic from budgeting, finding the best loan to ways to boost your credit. The information they provide can help put you on the fast track to repairing your credit and erasing your problems with debt.
Positive Payment History
Nothing helps you recover from debt faster than demonstrating a positive payment history. Erasing your negative history and delinquencies does take time and patience, but can be done with a little persistence. The trick is finding the best loan to help establish new, positive borrowing history. Start with unsecured debt, such as a credit card, and maintain a manageable balance for 6 to 12 months. Never let the balance exceed 30 percent of the total credit limit and try to pay it off a time or two over the next year. A secured debt will help you gain ground faster but should be carefully considered and used wisely. Don’t overextend yourself too quickly with a secured credit line and always be sure to make payments as instructed.