If you’re facing financial hardship, filing for Chapter 13 or Chapter 7 bankruptcy is often the best option to help you regain your financial footing. However, while this will get you out of debt, it will also affect your credit score. Because this will impact your ability to obtain a loan or apply for a credit card, you’ll want to improve your score as soon as possible. If you’ve recently filed for bankruptcy, here are a few tips to keep in mind. 

How to Boost Your Post-Bankruptcy Credit Score

1. Keep Track of Your Penalty Time

Federal bankruptcy law mandates that a filing can only remain on your credit report for seven to 10 years. This time starts counting down from the date of your filing, so keep track of that date. Additionally, you’ll have to abide by a repayment schedule for a Chapter 13 bankruptcy, which will typically force you into a three- to five-year repayment plan. This time does count, so, by the time you’ve finished repaying your debts, you may only have two to five years of the filing left on your record. 

2. Check Your Credit Report

Many people assume that their credit profiles will accurately reflect the bankruptcy, but mistakes do happen. Be sure each account listed on your report says that the debt has been discharged or included in the bankruptcy. If an account says anything else, you should contact that credit bureau immediately. Whether you’ve filed for Chapter 13 or Chapter 7 bankruptcy, this type of error can negatively impact your penalty period.

3. Create an Actionable Budget

A clean financial slate is an opportune time to create an actionable budget that will keep you out of the hole. Your budget should provide the means for you to pay all of your bills on time without having to resort to credit cards and loans. Ideally, work to save 10 to 20% each month to deposit into a high-interest savings account.

4. Obtain a Secured Credit Card

A secured credit card is intended for young adults or someone recovering from a Chapter 13 or Chapter 7 bankruptcy. It’s a credit card that’s linked to a checking account with a minimum required balance. You may be required to maintain a $200 balance in the checking account and, in exchange, you may be awarded a credit limit of up to $200. This helps you rebuild your credit without risking falling into more debt.

If you’re faced with overwhelming debt, it may be worthwhile to consult an attorney with experience in handling bankruptcies. For more than 20 years, the Law Offices of Harry G. Lasser have been helping people recover from their financial problems, and determine whether they’d benefit from Chapter 13 or Chapter 7 bankruptcy. To learn more about how an attorney can help you, call (931) 372-9988 and schedule a free initial consultation. Visit the firm’s website to learn more about their practice areas.