Did you recently file for bankruptcy? Are you worried about your credit? Many bankruptcy filers are surprised by how quickly they can get started repairing their credit after bankruptcy. Rebuilding your credit after bankruptcy is not easy, but it can be done.
Tips for Recovering After Bankruptcy:
- Use Credit. This seems counterintuitive. You just filed bankruptcy and discharged your debt. Many instinctively want to stop using credit altogether. This is smart in some ways, but for those who wish or need to rebuild their credit, it is important that they do not dismiss credit. In order for your credit to improve, you need to have some type of open credit account that are being reported in good standing.
- Get a Secured Credit Card. It can be hard to get approved, so you may want to start with a secured credit card. There are many viable options available. Secured cards will require that you provide a deposit to open the account. They will also offer low limits. They are a great tool to rebuilding your credit after bankruptcy. Shop around and find one with the best terms. Before choosing a secured credit card, verify that it will report to the credit bureaus monthly; some do not.
- Use Credit Conservatively. Just as important as having an open credit account reporting monthly to the credit bureaus is using the credit you have wisely. Keep your accounts active. For example, use your secured credit card each month to make small purchases (that are always within your budget). Than make sure you are paying the bill every single month, on time and in full. This will show the credit reporting agencies that you are responsible with your credit accounts, and your credit score will start to improve. As soon as your score improves enough to apply for a traditional credit card, you should do so and switch to using the unsecured card.
- Always Pay On Time. Make sure you are always paying your bills on time and in full. This includes your regular monthly bills, such as, utility bills, rent, medical bills, etc.
- Beware of Credit Repair Scams. There is no other way to rebuild your credit outside of being financially disciplined and working hard to have credit accounts in good standing. Some will offer to repair your credit for a fee, and although some are legitimate, many of these “services” are scams.
Rebuilding your credit after bankruptcy is difficult, but it is worth it. If you need help filing for bankruptcy or if you need to discuss your options to determine what will be the most helpful action to take in your situation, we can help. Call the experienced bankruptcy attorneys at Aronow Law PC today.