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If you find yourself facing endless letters and calls from creditors, bankruptcy may be the solution. A successful filing allows for your debts to be discharged — meaning you don’t have to pay them back. The drawback is that your credit score will take a hit. It’s not permanent, however. Follow these steps to start regaining credit.  

5 Ways to Boost Credit After Bankruptcy 

1. Establish Your Baseline

Look up your credit score. You need to know what your starting point is so you can track your progress. While it might be scary at first, it will ultimately be motivating to see the number climb over time.

2. Get a Secured Credit Card

You probably won’t be eligible for a regular credit card immediately after filing for bankruptcy. In the meantime, get a secured card, which requires you to back the credit line with a cash deposit. Use it responsibly and pay off the minimum amount due at least once, if not more often, per month. Avoid repeating past mistakes, such as making impulse purchases on the card. 

3. Take Out a Loan

bankruptcyDiversifying the type of debt you have will improve your credit rating faster. Take out a small loan you’re confident you can pay off. If you can’t get approved for one, ask a trusted relative to co-sign one for you. Be extremely cautious in your approach to this method. You may want to consult with a financial advisor or other professional first. 

4. Create an Emergency Fund

Make a budget, taking into account all your monthly expenses, including everything from housing and food to debt obligations. Save money every month, even if you can only afford a dollar or two. Small, consistent additions are better than none at all.  That way when emergencies strike — like the “check engine” light in your car comes on — you’ll have money to pay for them without needing to turn to credit.

5. Be Patient

Don’t expect your credit rating to ramp up overnight. Be patient and focus on the end goal: a more stable financial future. Even if you take all of these steps within a month or two of your filing, it may take up to a year of consistent practice before you detect growth. 

 

When petitioning for bankruptcy, you don’t want to make mistakes delaying or endangering the success of your filing. Let O'Connor Mikita & Davidson LLC of Cincinnati, OH, handle the complicated paperwork and guide you through the process. With their people-first approach and friendly team, they’ll ease the stress of whatever legal troubles you may be facing. Visit their website for a full overview of their practice areas. For an appointment, call (513) 793-5297.

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