There are few people who get to walk all their life on a bed of roses. Most of them have to go through all kinds of ups and downs, of which the finances are often an important element. For example, a lot of people take loans but end up in such a mess that they are not able to repay and default. Sometimes this leaves them with no other option but to declare bankruptcy.
If you were unfortunate to go through something similar to this, then you needn't worry, for you are not alone.
Although most of the damage caused by bankruptcy can be compensated for and overcome, there are some things that don't go away that easily. One of these things is the mention of bankruptcy on your free credit report.
In personal finance, there are few things that can be worse than find your name on a loan defaulter list. Finding a remark of bankruptcy is one of them as it makes it nearly impossible to get a loan or a credit card. The fact is that no lender would trust a person who had gone bankrupt, even if it was back then in 2010 or even earlier.
Bankruptcy is not a taboo subject, and neither is it uncommon. However, it's still a major event in your life that will follow you for years.
There are many credit bureaus that won’t erase bankruptcy for up to 10 years. So, this means that for 10 years you will have a hard time getting a loan. Does this mean that there is no solution? The answer is "maybe, or maybe not".
Many credit bureaus automatically delete bankruptcy from the free credit report of an individual after 7-10 years (whichever is the standard they follow) have gone by since the filing date. However, this doesn’t mean you can't speed up the process.
By taking certain measures, not only you can greatly improve your credit score but also remove bankruptcy faster than usual. Some really easy and simple things that you can do are:
A lot of people who have a poor credit score start using credit cards to improve their score. This is because it's one of the fastest methods that get great results.
Since your current credit situation is kind of dicey, you may not get a standard credit card. However, you can apply for a secured credit card which is easier to get.
It's actually just like a regular credit card, but it's secured by a certain amount called the security deposit. It's the amount you keep with the card provider as collateral.
One thing that you must remember when using a credit card is to keep the credit utilization always under control. Ideally, it should not exceed 30% of the limit. So, if your credit card limit is Rs. 1 lakh, then you should not spend more than Rs. 30,000 a month.
Whether it's credit card bills, utility bills, or even insurance premiums, etc. it's important to develop a habit of timely payments if you want to improve credit score and remove bankruptcy from the report. This is because your repayment history makes for as much as 30% to 40% of your overall score.
For you, getting away from any kind of loan may seem like a good idea to remove bankruptcy from your report, but it's not true.
If you want to get results as quickly as possible and improve your creditworthiness then it's a really good idea to get a small personal loan. You can take it for a new car, home renovation, or any another valid purpose. Just be sure to pick a small amount that you are able to repay to the bank rather than ending up in a loan defaulter list.
Just like timely credit card payments, timely loan EMI payments can also do wonders for your credit score. It also helps a lender to trust you easily.
So, these were some of the top ways to remove bankruptcy from your report as quickly as possible. Of course, if you want even faster results, then you can consult a professional.