Rebuilding Credit After Bankruptcy

If you’re dealing with debt and considering bankruptcy you’re probably worried about your credit score. How will bankruptcy affect your credit score and will you ever recover? You can see here how bankruptcy might affect your credit score. But most importantly, we want you to know you can and will recover financially after bankruptcy. Rebuilding credit takes some time, but we can help you on your road to financial success and a bright future. Here are some of the most important things you can do to rebuild your credit.

Check your credit.

First, it’s important that you know your credit score before and after bankruptcy. We help you check your credit score before you file bankruptcy, so you know where you stand. You’ll need to check your score again after bankruptcy and check that your bankruptcy information was recorded accurately. It will be important to make sure that the dates are correct on your filing and that the discharged accounts show zero balances. This will serve as the clean state where you can begin to rebuild your credit. Your bankruptcy will stay on your report for 10 years, but it does not have to negatively affect your credit the entire time.  You can recover your good credit in as little as two years. Then, when it does drop off your report in 10 years, it really can be like it never happened.

Get a new credit card.

While it may seem counter-intuitive to open a new line of credit right after discharging debts, this is exactly what you need to do after bankruptcy. However, instead of opening a new unsecured credit card, we recommend a secured line of credit. While unsecured credit cards probably contributed to your financial problems before, a secured credit card requires you to make a deposit before you can use it. This means you’re not spending money you don’t have. But it also means you’re proving to banks and credit reporting agencies that you are serious about rebuilding credit. Use this secured line of credit and pay the bills on time and you’ll start seeing that credit score creep back up.

Pay your bills on time.

One of the best things you can do for your credit score is paying every bill on time. This includes utility bills, taxes, alimony, student loan payments etc. There are some debts not typically dischargeable via bankruptcy, so you’ll need to be especially diligent about paying those debts. Consistent, punctual payments on all of these accounts are important to banks and credit reporting agencies. Making every payment, every time will be key to your financial success.

Live on a budget.

Learning how to spend responsibly and live within a budget will determine your success after bankruptcy. This takes practice and consistent effort, but tracking your income and spending are crucial. There are many great budget and tracking apps and programs that can help you. Tracking your spending and knowing your financial position will ensure you can not just recover, but thrive, no matter your income. It doesn’t seem fun or glamorous, but working at it consistently will open financial doors and opportunities for the rest of your life.

We can help you with rebuilding credit.

We love nothing more than feeling we’ve really helped someone build a financial future for themselves and their family. At Rank & Karnes you are important as a person and we take time to walk you through not only bankruptcy, but all the wonderful things that come after. We pride ourselves on helping you learn, not just pushing you through bankruptcy and sending you away. We’re here to answer questions, point you in the right direction and support your financial recovery. When you choose to file bankruptcy with us, you’re choosing a team to help you succeed, through bankruptcy and beyond. Call for your free bankruptcy consultation today.