Tips To Improve Your Credit Score After Bankruptcy
Many families who could benefit from bankruptcy fail to do so out of fear. There is a common misconception that bankruptcy will permanently destroy your credit score. In reality, bankruptcy does initially lower credit scores, but this is temporary, usually only lasting until the case is over. After bankruptcy, there are ample opportunities to rebuild your score almost immediately. When you work with us, we will make sure that you have the tools to confidently rebuild your credit. It is our goal to help you find a secure financial future.
5 Tips To Rebuild Your Credit After Bankruptcy
Filing for bankruptcy will either eliminate your debts if you file under Chapter 7 or reorganize your debts so that you can make your monthly payments if you file under Chapter 13. This provides the opportunity you need to raise your credit score and improve your standing. We regularly recommend that our Indiana and Kentucky clients take the following actions to improve their credit score after bankruptcy:
- Pay all of your bills on time. The best way to build credit is to meet all of your payments. This shows creditors that you can be trusted with larger amounts of credit in the future.
- Maintain a low credit utilization ratio. Only spend 10 to 30 percent of your allotted credit limit each month. This shows that you are in a positive financial position that does not require you to maximize your credit.
- Set up automatic payments or mark payment dates on your calendar. With numerous bills to pay, all with different due dates, it is easy to forget a payment. Avoid this mistake by either setting up auto payments or clearly marking each due date on your monthly calendar.
- Apply for an unsecured store brand credit card. Ideally no one would ever need a credit card – but in America that’s just not feasible. Credit cards are needed to rent cars, buy airfare and even to run a tab at a restaurant. Since credit cards are almost essential, we recommend applying for a store brand credit card – one that offers rewards for places you normally shop. For example, some grocery chains offer “fuel points” for grocery purchases. You’ll buy groceries anyway, and the purchases will save money on gas (which you’ll also purchase regularly). These purchases are normal – and not for luxury expenses – so make your normal monthly purchases, and then pay the balance off each month!
- Ask trusted family members or friends to cosign your loan. If you are unable to secure a loan on your own, you can ask another person in good credit standing to back your loan. However, you must make all payments on time or you could damage their credit score as well.
Contact A Lawyer For Knowledgeable Debt Relief Counsel
If you are overwhelmed with debt, you deserve to work with an attorney who will take the time to meet with you personally and find the right solution for you. Call the Law Office of Allan E. Dunaway PLC, at to schedule a free initial consultation or email us today. We understand that bad things can happen that derail your financial plans. We’re here to help get you back on track. Our offices are located in Louisville, Kentucky, and Jeffersonville, Indiana.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.