Repairing Your Credit after Filing for Bankruptcy
Your life isn’t over after you file for bankruptcy. In fact, filing for bankruptcy could be the best thing that ever happened to you. It is a wake up call to many, and people tend to become more financially responsible individuals after going through the bankruptcy process. They certainly don’t want to go through it again.
Though bankruptcy may end up being a positive step forward in your life, the immediate effects on your credit will be drastic. There is no getting around it. Your credit will suffer due to you filing for bankruptcy and receiving a discharge of your debt, but it is not permanent. At the most, bankruptcy will stay on your credit report for ten years, but you can begin repairing your credit the day you receive your discharge. Here are a few tips to help you in repairing your credit after bankruptcy.
Make Sure Your Credit Report is Up to Date
You want your bankruptcy to be on your credit report. That mean your debts have been discharged. Having a bankruptcy on your credit report is better than having twelve delinquent accounts. You should also verify that everything else on your credit report is accurate. That is a fresh start. Don’t let inaccurate reports ruin it.
Pay Debts That Were Not Discharged On Time
This is a great way to begin repairing your credit. Start paying those student loans and other debts on time, every time. That will go a long way towards showing creditors that you are a changed man.
There are people out there who will tell you they can get a bankruptcy off your credit report. They are lying through their teeth. There is no way to legally remove a bankruptcy from your credit report. They just want your money.
Get a New Credit Card
What? Yes, you need to establish new credit and a positive history with creditors. Taking out a low limit credit card is a quick way to do this. You may have trouble getting an unsecured credit card, but you should be able to easily obtain a secured credit card. After a period of timely payments, most companies will convert your secured credit card to an unsecured credit card. Make sure to make those payments on time. The last thing you need at this point is another bad mark,
Maintain a Low Balance
You need to use your credit card to improve your credit score, but you shouldn’t use it too often. Try to keep your balance between 10 to 30 percent of your limit.
Apply for a Loan
After a few years, you should apply for a car loan. A home loan is probably still out of reach, but a car loan will show that you can satisfy a debt rather quickly. Paying off that car will go a long way towards improving your credit score.
Remember to Go Slow
Repairing your credit takes time. Doing too much too soon could backfire and cause you to miss a payment or default again. Take your time repairing your credit, and you are less likely to make a mistake.
Bankruptcy is not the end of the world. You won’t be without a car or home forever. Eventually, you will repair your credit rating. It just takes time.
If you are considering bankruptcy and would like to speak with an expert bankruptcy attorney for a free consultation, please call us at 214.748.4848 or e-mail us at Questions@BLJLaw.com. We would love to help you!
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