While filing for bankruptcy can feel like the end of the world, there are many ways to rebuild your credit score afterward. It’s important to know how bankruptcy works, and The Gil Law Firm in Dothan, AL, is here to help. They offer effective guidance and representation throughout the process, and can offer advice to help you improve your credit score after you’ve filed.
7 Ways to Rebuild Your Credit Score After Bankruptcy
1. Analyze Your Credit Report
It’s important to know your report’s status before you begin rebuilding your credit after bankruptcy. Review your current credit report thoroughly for errors, inconsistencies, and spending patterns. This will give you an accurate depiction of how it’s organized and distributed.
2. Pay on Time
The first step to rebuilding your credit score is to pay your bills when they’re due. Payment history constitutes 35% of your credit score, so set monthly reminders for paying your credit cards and various bills on time.
3. Avoid Credit Repair Agencies
Credit repair agencies scout for Americans with poor credit after bankruptcy. In many cases, there’s very little they can do—it’s best to do it yourself.
4. Apply for a Secured Credit Card
While it seems iffy, opening a new credit card can help you start off on the right foot. You’ll likely need to put down a deposit that’s 50% of the credit limit, but as long as you pay it off each month, you’ll begin building positive credit.
5. Contact a Credit Counseling Agency
A little help never hurts, and a nonprofit credit counseling agency can help you with setting budgets, as well as building an effective recovery plan. Visit the National Foundation for Credit Counseling for a list of agencies in your area.
6. Consider a Secured Loan
Taking a loan from a credit union or community bank is great option for rebuilding credit. Though you’ll be borrowing against your own money, the financial institution will provide credit bureaus with your payment history to show positive credit management.
7. Monitor Your Financials & Credit Score
To stay safe, you’ll need to monitor your spending and credit closely going forward. New credit cards and loans can all help you recover from bankruptcy, but if you’re repeating past mistakes, they’ll only cause more damage.
Recovering from bankruptcy isn’t impossible if you take measures to ensure you’re managing your credit responsibly. Attorneys at The Gil Law Firm offer free consultations to review and guide you through your bankruptcy case, so visit their website and Facebook to learn more. If you’re considering filing for Chapter 7 or Chapter 13 bankruptcy, call them today at (334) 673-0100 to schedule a meeting with an attorney.