I’ve filed a chapter 13 due to divorce (no previous credit issues) and am paying rightly on my repayment plan having several years to go. I’m trying to learn ways to re-establish my credit and raise my credit score so that when done I’ll be in a strong position. Long before filing my 13, I’d bought a car and am making on-time payments. I think that will help, but since I can’t use new credit until the payment plan is over, do you have other suggestions or references (other than keep paying on time) that I can use or do? I’d be interested in books, websites, blogs, councilors, anything…
Regarding my creditors, I believe my accounts are still open. What should be done regarding those accounts and what the creditors are or are not telling the credit reporting agencies? Can I and should I close the old accounts? Also, I’ve not taken a recent look at my credit report so I don’t know what each debtor is showing? I’d appreciate your comments. There isn’t a good source for information and advice on these subjects and attorney’s are charging over $200 per hour for half baked advice that usually take the most cautious approach, even when not necessary.
–Rangeman
Jonathan Ginsberg responds: Since you are still in your Chapter 13, you can’t really do too much in terms of new credit, but you can take several steps to improve what you currently have.
1. pull your credit reports from all three credit bureaus. All open accounts should show that they are being paid thru your Chapter 13. If you have any showing a charge off or an unpaid delinquency, you should challenge these erroneous entries pursuant to the Fair Credit Reporting Act. Write letters (return receipt requested) to the particular credit bureau and request that the erroneous reporting be corrected. Debts in Chapter 13 are in payment status and should be reflected accordingly.
2. Most credit gurus advise against closing old accounts. Credit reports are basically historical records and any good credit you have, even if it is old, will help you.
3. As far as references, the best credit related information that I see regularly is at Clark Howard’s web site, Ilyce Glink’s web site and Dave Ramsey’s web site.
4. Once you are out of your Chapter 13, you should wait about two months, then request copies of all 3 credit bureau reports. All of the accounts paid in the Chapter 13 (such as credit cards and other non-pay direct accounts) should show zero balances. Frequently, I see credit reports post bankruptcy showing outstanding balances. Once you receive your Chapter 13 discharge, these balances should be zero.
[tags] restore credit after bankruptcy, Clark Howard, credit reports, challenge inaccurate credit report [/tags]