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When you file for bankruptcy, it can be a long but essential road to getting your finances back on track. Once your bankruptcy lawyer has led you through the process, and you are finally free from the pressure of your old debts, you need to develop a fiscally responsible lifestyle for the sake of your future. Since your credit sees the most significant impact of this financial move, here is how to rebuild that essential score in the years to come after bankruptcy. 

Getting Your Credit Score Back On Track After Bankruptcy

1. Set a Strict Budget

Keeping track of your expenses and planning ahead for big purchases are the pillars of rebuilding your credit following bankruptcy. If you’ve already completed the process through a bankruptcy lawyer, your pre-discharge credit counseling should give you an overview of how to budget, and non-profit credit counseling agencies will also offer free basic help with this topic. An important move is to build an emergency fund into your budget; having even just $250 set aside for an unanticipated expense can keep you on track instead of resorting to credit card debt.

2. Check Your Credit Report Regularly

bankruptcy lawyerYou can find several free credit reports online nowadays, and checking your credit score does not impact it in any way. Remaining vigilant over time, however, can help you see the progress of your smart financial decisions and alert you to anything that runs amiss. To start, check what your score lists as a filing date for your bankruptcy and make sure it aligns with the date your bankruptcy lawyer has on record, as it will remain on your score for up to ten years. A sudden drop in credit can even signal cases of identity theft and save you the trouble of applying for credit building products that you don’t qualify for at your current score.

3. Consider a Product to Build Credit

The key to building credit is using products that reflect to lenders that you’re responsible with your money. A few options that a bankruptcy attorney would suggest include:

  • Secured loans, which financial institutions offer to help you improve credit. Some depend on an upfront deposit while others only give you the money you’re loaned after you’ve made every payment. The goal is for you to create a line of credit while the lender doesn’t have to worry about the risk of you not paying.
  • Secured credit cards, which are another line of credit that is backed by a deposit you pay upfront. It is a short term solution that should be used to mend your credit until you can become eligible for another card. 
  • Becoming an authorized user for a credit card that a fiscally responsible loved one owns. While it will have a smaller impact than other routes, it can help if the primary user of the card is responsible about on-time payments. 

With any option, it is essential to read the details of what you’re signing up for so you don’t get hit with unexpectedly high interest rates or annual fees.  

 

To get your finances back on track, recruit the help of a qualified bankruptcy lawyer that will guide you through the process efficiently. In Clermont County, OH, those who are struggling with debt turn to Donald Swartz at Swartz Law Office. With nearly 15 years of experience in a variety of disciplines, including bankruptcy, real estate, and family law, he offers a breadth of legal knowledge that can assist you through tough financial situations. To plot your course to better fiscal health, give his office a call today at (513) 732-0900 or visit his website.

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