Once you've filed for bankruptcy, you may be worried about your credit score taking a big hit. While it is true that your credit score can go down after bankruptcy, it is not going to stay that way forever. There are things you can do to help improve your score, and over time, even be qualified for new credit, car loans, and mortgages with favorable interest rates and terms.
Here are some tips to help you rebuild your credit after filing for bankruptcy:
Apply for a new credit card
Opening new lines of credit is important when trying to re-establish trust with lenders and creating a positive credit history. Right after a bankruptcy, it may be hard to secure new credit card, but there are other options, such as applying for a secured credit card that requires a cash security deposit.
Make your payments on time
You will need to make consistent, on-time payments every month in order to rebuild your credit. Try enrolling in autopay or setting a reminder for yourself to make sure you pay off the balance. Over time, you'll find that your credit score will slowly improve as you continue to pay off your balances.
Keep balances low
Having a lower credit utilization is a sign of responsible spending to lenders and makes it easier for you to pay off your balances each month. Financial experts recommend keeping your credit utilization to less than 30%.
Become an authorized user or have a cosigner
If you have friends or family who are willing to add you as an authorized user or cosign a loan with you, that can also help you rebuild your credit. Having your name attached to the card with another person means you can benefit from that card's positive credit actions.
Struggling with Debt?
If you are struggling with debt and are worried about being able to keep up with your bills, talk to one of our attorneys about whether bankruptcy is the right option for you. We can help you decide if filing for bankruptcy can be an effective way to get rid of your debts.
Schedule a free consultation today.