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Bankruptcy can taint your credit report for up to 10 years, but you can boost your score much sooner.
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Boost your credit score after bankruptcy

Filing for bankruptcy is not a decision most people take lightly, especially because it affects access to new credit, home loans and even employment opportunities, not to mention the emotional impact filing for bankruptcy can have.

Nevertheless, more than 1 million consumers filed for bankruptcy during the 12-month period ending Sept. 30, 2008, according to federal court statistics released in December. This compares to 775,344 filings over the same period the year before.

Bankruptcies can remain on your credit report for up to 10 years and can decimate your credit score by hundreds of points. But by adopting these strategies, you could boost your credit score and become creditworthy several years before the bankruptcy drops off your credit report.

7 steps to a higher credit score
Check your credit reports
After a bankruptcy discharge, make sure that your credit report is accurate. After all, your goal is to boost your credit score quickly, and inaccurate information will only prolong the time it takes for you to score high enough for conventional credit.

"Make sure that lenders are no longer updating your account every month, making it appear as though the delinquency just happened last month," says Ethan Dornhelm, principal scientist at FICO Scoring Solutions Division.

Debts that were discharged through bankruptcy should be accurately reported along with "good items" -- including accounts that were "paid as agreed" -- and any other accounts that you continue to pay on time that were not discharged in the bankruptcy.

For example, you typically cannot discharge federal student loans in bankruptcy.

Get a copy of your credit report and make sure everything is accurate. You are entitled to one free credit report every 12 months from each of the three national credit bureaus. You can get them all at once, or better yet, stagger them every four months so you can your report more frequently.

"If it's not accurate, consumers have to contact the credit bureaus themselves and the bureau in turn investigates and contacts the creditor," Dornhelm says.

Credit bureaus generally have 30 to 45 days to investigate your claim.

You can request a free copy of your credit report at www.annualcreditreport.com or by contacting Equifax, Experian and TransUnion directly.


-- Posted: Feb. 18, 2009
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