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Repair Your Credit After A Bankruptcy

Repair Your Credit After A Bankruptcy

Filing for bankruptcy will help you obtain financial relief and give you a fresh start. It can eliminate a majority, if not all of your debts. However, it will also hurt your credit. A chapter 7 bankruptcy will stay on your credit report for 10 years after discharge, and a chapter 13 bankruptcy will stay on for 7 years. Therefore, after your bankruptcy discharge, it is extremely important to start repairing your credit.

You went through a long process with your bankruptcy and got a clean start. Take advantage of your new start and become more financially responsible. After all, you don’t want to end up in the same situation in the future.

Here are some helpful tips to start rebuilding:

  • Pay your bills on time: Paying your monthly bills on time is a surefire way to rebuild your credit. Paying bills on time makes up for 35% of your credit score. Pay on time and your score will start to rise.
  • Don’t use a credit repair company: Often, these companies make false promises and never come through for you. It’s easy for you to take control of this process and will be more effective too. You can can do it yourself!
  • Use secured credit cards: Using a secured credit card (one that requires a cash collateral deposit) is an excellent way to rebuild after your bankruptcy. Remember to use it responsibly, make smaller purchases, keep low balances, and pay off the card in full each month.
  • Join a credit union: Credit unions are smaller, member-owned institutions who use more criteria than traditional banks when giving out credit and loans. Contact your local credit union for more information about how to apply for an account or a loan.
  • Add a loan: A year or two after your bankruptcy is over, apply for a car loan or a line of credit (try going through a credit union). You need different types of credit to rebuild, so having a loan will add to the rebuilding process. Just make sure your monthly payments are affordable, and of course, pay on time.
  • Become an authorized user on a credit card: Have someone add you as an authorized user on their card. Their credit history will then typically be reported on your report. Just make sure that person makes their payments on time!
  • Know your credit limits: Once you have credit cards again, know your credit limit and keep the balances low on each account. Use the cards sparingly, and pay each bill off in full each month.

These are just several of the many ways you can start to rebuild your credit after your bankruptcy. Always remember that the key to rebuilding is to spend within your means and responsibly. Make a budget, stick with it, and always pay your bills in time! Contact Atlantis Law Firm for more tips.

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