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Regardless of your situation, there are many valid reasons for filing for bankruptcy. Once the dust settles, you’ll have the tools necessary to start fresh. Of course, the first step should be rebuilding your credit, so you can rent a house, apply for loans, or move toward other milestones. To bring that number to a reasonable range, take advantage of these do’s and don’ts.

Do:

Get a secured credit card.

With a standard credit card, lenders allow you to temporarily spend money, which isn’t yours, making it easy to fall behind. When you open a secured credit card, you fund the account yourself. For example, you’ll have to give the company $500 upfront for a $500 credit limit. While this doesn’t offer you extra spending money, you can rebuild your credit with minimal risk.

Choose wisely when late.

If an emergency arises and you have to be late on a payment, find out which bills will get reported to credit reporting agencies. For example, even though missing a student loan or utility payment seems serious, these won’t immediately decrease your credit score like missing a credit card or auto loan payment.

Don’t:

Use your credit cards to their full limit.

bankruptcyAfter bankruptcy, you must change the way you look at your credit cards. While you might have a $1,000 limit, you should never spend more than 25% of this, or $250. In addition to raising your credit score, sticking to this restriction makes it easier to pay off what you owe.

Close accounts to prevent spending.

If you have many credit lines open and want to spend less, you might think closing these accounts is the safest bet. However, the more accounts or lines of credit you have, the more lenders will trust you, and the lower your overall credit utilization will be. For the best results, keep the old accounts open, but avoid using them.

 

For bankruptcy advice and debt relief, turn to Nancy V. Jacob of Cincinnati, OH. She has over 29 years of experience helping clients get out of debt. With her private office setting and personalized office, you can trust this lawyer has your best interests in mind. To set up a free consultation for bankruptcy help, call (513) 921-1400. You can also visit the website to learn more about her experience as a member of the National Association of Consumer Bankruptcy Attorneys (NACBA).

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