AZ Arizona Business Blog

The old saying of time and good behavior comes into the picture when trying to repair your credit after bankruptcy. The effects of a bankruptcy will fade with time and even while it does follow you, you can still work to repair your credit after a bankruptcy filing. You can do this by being financially responsible, by paying all of your bills on time, by reducing your debt, and by closing old accounts. Over time, this shows a potential lender that your past financial misfortune was an isolated event, and that you’ve demonstrated your financial responsibility since that time. On the other hand, if the filing was just one of a long series of financial misfortunes and irresponsible actions, then it suggests a dangerous pattern to the lenders.

The first thing to think about when you want to repair your credit after filing bankruptcy is the time factor. The Fair Credit Reporting Act establishes certain guidelines that the three credit reporting companies, Equifax, Experian and Trans Union, must follow. One of these guidelines has to do with Chapter 7 bankruptcy. By law, a bankruptcy filing cannot stay on your credit report or more than 10 years. Of course, this is both good and bad depending on how you look at it or it down side is that a bankruptcy can stay on your record for up to a decade, so it will be noticeable to any lender who reviews your credit history. The upside is that it can’t follow you forever. One thing to remember, many people wait too long to file because of being worried about the consequences and the stigma that is associated with bankruptcy. Sometimes it’s better to weigh your options, go ahead and file and get the creditors off your back, so you can start rebuilding your life and get a fresh start.

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