Credit After Bankruptcy
After your bankruptcy is discharged, you’ll want to begin re-establishing your credit.
Some folks think that it’s a good idea to shy away from credit after bankruptcy, but there are countless reasons why you should rebuild your credit score.
Ask a lawyer your questions about how to file bankruptcy and how your credit may be affected after you file.
Why You Need Credit
In today’s society, most people need credit to buy a home or car and pursue the American Dream.
Your credit score can determine anything from the amount of deposit you pay for utilities to the terms and interest rate on your next mortgage loan or car. By rebuilding your credit, you make credit available.
If you have no credit history after your bankruptcy, lenders have no recent positive criteria to look at on your credit report. For this reason, you should establish credit accounts and manage them wisely.
This improves your credit score and demonstrates your financial responsibility, which will likely make it easier for you to later get a mortgage or car loan at a reasonable rate.
Rebuilding Credit After Bankruptcy
When you’re beginning to rebuild your credit after your debt discharge through bankruptcy, you will likely receive many credit card offers in the mail.
Although you should open new credit accounts, many of these offers will likely be for cards with extremely low limits that come with large yearly and activation fees.
You should choose new credit accounts wisely, read the fine print, and check out the company with the Better Business Bureau before signing up.
Many of the legitimate credit offers you may receive will come with a higher interest rate after your bankruptcy is discharged.
Your credit score will likely be low, so low interest credit cards and loans may be out of reach for the first couple of years. However, as you re-establish your credit by managing your new accounts wisely, your credit score will improve.
The negative items on your credit report - even bankruptcy - are also less damaging as they age. You may open new accounts that charge a high interest rate, make small purchases and keep the accounts current in order to qualify for lower interest cards and loans.
Maintaining Good Credit
In order to improve and maintain your credit score, you should efficiently manage your new credit accounts and be sure to make all payments on time.
You can avoid falling into the consumer credit debt trap that may have led to your bankruptcy by establishing a budget to be sure all of your financial obligations can be easily met.
You should also monitor your credit profiles with the three major credit bureaus.
If you spot any inaccurate information, you should contact the creditor and the credit bureaus to have it corrected.
It’s also important to keep a close eye on your credit history to avoid becoming a victim of identity theft.
Speak With a Bankruptcy Lawyer
If you have been considering filing bankruptcy but don’t know where to start, Bankruptcy.Me can help. We can connect you with a local bankruptcy lawyer for free.
Make the first move and fill out the below form to be connected with a bankruptcy lawyer today and get your bankruptcy questions answered.