Can you Eliminate Bankruptcy from Credit Report?

Bankruptcy is something that no one wants to declare in their lives. However, the worst usually comes when you least expect it. So, if you unfortunately had to declare bankruptcy in the past it is natural to feel conscious about your credit report and CIBIL rating.  However, the good news is that you don’t have to worry.

It’s possible to improve CIBIL score even after having to deal with bankruptcy. In fact, it’s possible to get a personal loan for defaulters, so your situation is still better as it’s merely a result of bad fortune.

Let’s get back to the original question:

Is it possible to Eliminate Bankruptcy from Credit Report?

The answer is “no”. You can’t eliminate bankruptcy from your credit report. However, that’s not all.

While it’s true you can’t simply wipe off the instance of bankruptcy from your credit report, it doesn’t mean you have to suffer from its consequences. If you have regained a strong financial status and are using your credit smartly, then it’s possible to improve your CIBIL rating and enjoy options better than a personal loan for loan defaulters. Just take the following measures:

Apply for a Credit Card

Since you have just come out of bankruptcy, it’s likely that you CIBIL rating has taken a beating. So, what you need to do immediately is to start improving your score, and the best way to do that is to get a credit card.

Getting a credit card is easy, simple, and yet super-efficient. However, the problem is that in your case even that may prove to be troublesome. So, if you are unable to get a regular credit card, you can get a secured one instead. It’s a credit card that you get apply making a deposit as security. Usually, the security money is the same as your credit limit. So, if the credit limit on your credit card is Rs. 1 lakh, then you may need to deposit Rs. 1 lakh as security.

Monitor Credit Score

You can’t make progress unless you monitor it. So, be sure to check your CIBIL rating from time to time. This way, if you see your score dropping then you can find out the reason behind it and fix the problem.

By choosing to avoid score monitoring you may not be able to identify a major problem in advance and damage your credit score as a result.

Pay Your Bills on Time and Keep Utilization Low

There are two most important things to take care of when using a secured credit card for improving cibil score– paying your bills on time, and keeping your credit utilization ratio low.

Believe it or not, every single EMI payment or credit card bill payment matters in the calculation of your credit score. Thus, it’s important that you pay on time without fail. If you are unable to arrange the money for a particular instance then you can even borrow from someone if needed. It’s still better than missing the due date for the payment.

Your credit utilization must also be under control. So, if you tend to take out your credit card a lot when shopping, then maybe you should check the practice. Ideally, you should keep your credit utilization below 30% or 35%. So, it’s better to use your credit card when absolutely necessary, and for the rest of the time, you can use cash instead.

Don’t Close Old Accounts

It may make sense, in theory, to close your old accounts to limit the moving parts in your credit system. However, your old accounts are often the reason behind a large portion of your credit score. Thus, closing such accounts could damage it.

Whenever you have to close a bank account or a credit card account then do review the payment history associated with it and the duration itself. If the former is good, and the latter is long, then maybe it’s better to keep it open at least for a while.

If your credit score has reduced greatly after an experience with bankruptcy, you needn’t lose hope. It’s always possible to make progress no matter how bad your condition is. Just follow the tips given above and with time you will surely see an improvement. Good luck!