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Rebuild Your Credit Score After Bankruptcy

Rebuilding Credit after Filing for Bankruptcy

Did you recently file for Bankruptcy? If so, you may be feeling a little overwhelmed by the idea of rebuilding your credit history. Whatever credit you had prior to filing for bankruptcy is no longer in a proper standing. Although you will be starting with a clean slate, the thought of building your credit all over again might leave you feeling uneasy and desperate for help. People commonly believe that filing for Bankruptcy ruins your financial future. This is certainly not true.

However, while it is true that bankruptcy remains on your credit reports for ten (10) years, with time, things will get better, and the bankruptcy impact will slowly fade away. It is recommended to contact a local and experienced bankruptcy attorney to discuss your case. This article will discuss the ways to rebuild the credit after filing for Bankruptcy.

Basics of Re-building Credit

After filing for bankruptcy, lenders are interested in seeing whether you have enough income to pay the current obligations. If it looks like you have lighter debt burden, you will be seen as a more attractive borrower. As an attractive borrower, lenders will likely not have to worry about you re-filing for bankruptcy to get rid of any new debt. It is important to remember that immediately after filing for bankruptcy, there is eight (8) year window where you will not be able to receive another bankruptcy discharge of debts.

To begin rebuilding your credit, you can start by creating a budget to help you take care of your finances effectively. Prior to you filing for bankruptcy, you likely had attended the pre-discharge counseling where you likely learned information on how to budget your finances. However, if for some reason you did not attend any pre-discharge counseling, don’t hesitate to seek help from credit counseling agency which can provide you with basic information on how to do financial budgeting. Additionally, you can also begin by building an emergency fund.

Planning your Re-building Credit Strategy

After filing for bankruptcy, you may be thinking creditors have lost respect for you. However, this is not the case at all. You can slowly re-build your credit history. It might seem harder than you think right now, but it can surely be done. Your main focus right now should be to build your credit history up, it is the same goal as someone who is starting from the scratch, but your situation is different as the creditors are aware of your financial standing.

In order to assess your situation, it is recommended you begin by running a free credit report. This process may seem a little daunting, but it is important to run a credit report. The credit report will provide with your credit score, which is calculated on the basis of the information you put in the credit report.

Once you receive the credit report, it is important to check the report for any errors. If you find any errors, it is important for you to dispute them and get the errors corrected. The free credit report will provide you with a run down of ten (10) years. Any late payments and existing debts will remain on the report for seven (7) years after the delinquencies. If you file for bankruptcy under Chapter 7, your debts will be wiped off, but the credit reports will show the entire history.

Additional Tips on Re-building Your Credit Rating

  • You are advised to open a checking or savings account. Having a financial history will help you secure a loan.
  • It is important to keep up with your post-bankruptcy bills on time. You might want to consider auto-paying to avoid late fees and late payments.
    Make sure you are current on all your accounts. By not being current on your accounts, creditors will likely intervene by sending your account to the collectors, which will negatively impact your credit score.
  • It is important to keep your credit card balances as low as possible
  • If you think you are falling behind on your payments, it is important to contact your creditors or see a credit counselor and make them aware of the situation. It is possible that the creditors will be willing to work with you
  • When possible, it is important to pay off the debts
  • It is a must that you be proactive in protecting yourself from identity theft by only using the secured websites. If you think your identity is stolen, it is important to seek help immediately to straighten things out.
  • Proactively protect your credit from identity theft by using secure websites
  • It is important to run your credit card report a few times in a year to monitor your progress. It will likely take time to raise your credit scores, however any little progress should help you stay motivated.

Rebuilding Credit History with Secured Credit Card

If you are just coming out of bankruptcy, obtaining a secured credit card can help you rebuild your credit. However, it is important to remember that until or unless bankruptcy is discharged, it is likely that you may not be able to receive a secured credit card. However, obtaining the secured credit card is not impossible. Post bankruptcy credit card options will likely be limited and you will be required to pay higher annual fees and high annual percentage rates.

If you do receive a secured credit card, you will be able to make a deposit in the saving accounts, which will secure a line of credit. However, there will be a credit limit on the secured credit card, which is generally the amount you deposit in the saving account minus any additional fees. To take advantage of the secured credit card, it is advised to make small purchases on the card and pay on time. Additionally, it is advised to keep the balances low, and generally 10% to 15% credit line each month is recommended.

One can only imagine how hard it is to start all over again after filing for bankruptcy. Additionally, starting from the scratch all over again to rebuild your credit history does not make things any easier either. It can take an emotional toll on you.

The experienced bankruptcy attorneys Coleman Legal Group, LLC can help you during this recovery process.  Out attorneys have experience in well over a thousand successful bankruptcy cases and related matters.  For more information on how you can rebuild your credit history after filing a bankruptcy, call us today at 770-609-1247 to speak with one of our caring bankruptcy lawyers.

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