Filing for bankruptcy allows some borrowers to reclaim their lives from burdensome debt, alleviating stress for those who have exhausted their other options. As welcome as this relief may be, it will have an immediate impact on your credit score, which may drop 100 points or more. Fortunately, this damage doesn’t have to be permanent, and many chapter 7 filers can begin rebuilding their credit within a few months. Here are some best practices to get back on the right path.
3 Tips for Rebuilding Your Credit Score
1. Review Your Credit Report
A few months after your bankruptcy is finalized, request a free copy of your credit report from each of the major bureaus. Carefully review your report to ensure all of the previous debts are marked as discharged—and be sure to report any mistakes immediately.
2. Apply for a Store Card
Store charge accounts generally have more lenient requirements than other types of loans, so you may be able to get a card even with a bankruptcy on your record. Making your payments on time and not carrying a balance from month to month will help bring up your credit score quickly.
3. Get a Credit Card
Six months to a year after bankruptcy, you may be able to qualify for an unsecured credit card. However, the interest rate and other terms may be unreasonable. If this is the case, apply for a secured credit account. Because the credit card is secured with a cash deposit, lenders are typically more willing to offer better terms to those with less-than-perfect credit. Secured credit cards have helped thousands of people rebuild their score at a steady pace. As long as you pay off the balance on time every month, you’ll see a difference soon and feel your financial confidence returning.
If you’re struggling with debts you can’t repay, The Law Office of J. Baron Groshon will help you get the relief you need. With offices in Charlotte, Concord, Gastonia, and Lake Norman, they serve borrowers throughout North Carolina, establishing a reputation for effective counsel in even the most difficult financial situations. Visit their website to learn more about the bankruptcy process and call (704) 342-2876 to schedule a consultation.