A Guide to Managing Your Credit Report after Filing for Bankruptcy

A Guide to Managing Your Credit Report after Filing for Bankruptcy

Filing for bankruptcy can be one of the best things for dealing with your debt. You could struggle for years to pay off your debt, bit by bit, just chipping away at it like trying to carve a sculpture into a glacier with an icepick. Or you can get a power sander and some dynamic and get the same job done much faster. That’s what bankruptcy is for your debt. You can dismiss your debt completely or get it reorganized under a more affordable payment plan, depending on your circumstances. 

You may be worried that filing for bankruptcy will destroy your credit. While bankruptcy will be a blow to your credit initially, it will not cause as much damage as would continuing to have high debts that you cannot pay. By working with a Gilbert bankruptcy attorney and filing the right chapter of bankruptcy, you give yourself the opportunity to restore your credit and your finances much more quickly. 

The actions you take after filing for bankruptcy also make a difference. Here are a few things you can do to restore your credit after your bankruptcy discharge: 

A Guide to Managing Your Credit Report after Filing for Bankruptcy

Get a Secured Credit Card

It may take awhile for you to get approved for a typical credit card after your bankruptcy. Most credit cards are unsecured, meaning that the company is relying on nothing more than your perceived ability to pay when deciding to lend you money. You aren’t likely to get one of these if you have a history of not paying.

However, there are secured credit cards, which are backed by a cash deposit. The lender allows you to borrow up to the amount you have. If you default on your payments, the lender knows it can seize that deposit and satisfy your debt. You are much more likely to be approved for such a card. Apply for and use your secured credit card regularly to start building a positive credit history.

Pay Everything on Time

There are other things you may continue to pay after your bankruptcy that report to your credit, such as your car insurance, your phone bill, or other utilities. Be sure that you pay all of these bills on time, every month. Over time, your credit score will slowly improve with your consistency. 

You won’t see dramatic improvements with this strategy alone, but when you combine it with other strategies, you will see big gains with time. 

Keep Applications to a Minimum

Every time you apply for new credit, an inquiry shows up on your credit report. The more inquiries you have, whether they resulted in approved applications or not, the more damage will be done to your credit score. The reason is that a lot of inquiries makes it look like you are having money problems and are looking to rely on credit to solve them. 

Keep your applications to a minimum. If you apply a couple of times and are denied, wait a few months before you apply again. Continuing to apply will only damage your credit more. 

Review Your Report Regularly

You need to keep tabs on your credit report to make sure that everything reported there is accurate. You don’t want your score to suffer needlessly because there’s an inaccuracy on your report. 

You can get a free credit report once a year. You should consider paying or a report every three to six months in addition to that. If you spot any errors on your report, file a correction with the credit bureau immediately. 

Rebuilding your credit after a bankruptcy filing will take a bit of time, but it likely won’t take as long as you think. You just need to stick to a budget and follow these steps, and you’ll see your score rebuild slowly. You’ll be free of debt, you’ll have the money to meet your needs, and you’ll soon have a credit score that will allow you to get approved for loans you might need as time goes on, such as to buy a new car or a home. 

Contact Gilbert Bankruptcy Lawyers today to learn more about the different types of bankruptcy and how they might help you get the debt relief you need and start rebuilding your financial future. We represent individuals on both Chapter 7 bankruptcy and Chapter 13 bankruptcy, and we represent businesses who need bankruptcy relief. We’ll help you understand how each of the options might benefit you the best. Call our bankruptcy law office today to schedule a consultation.

Published By:

Gilbert Bankruptcy Lawyers
Office: 480-448-9800
Email: [email protected]
Website: https://gilbertbankruptcylawyers.com