Share:

After filing for bankruptcy, it’s time for a fresh start, and part of rebuilding your life includes rebuilding your credit. A bankruptcy filing stays on your credit record for up to 10 years, but there are steps you can take now to increase it in the meantime.

How Can You Rebuild Credit After Filing for Bankruptcy?

1. Set a Budget

To make sure you don't fall back into debt, identify what money you have coming in and how much will need to go out for ongoing expenses. Keeping track of income and costs also lets you know how much money you'll have left for savings or incidental expenses. If you haven't set up a budget before, start with a spreadsheet that organizes income and expenses. Once you've set this up, stay on budget by entering your finances weekly to ensure you're on track.

2. Avoid Additional Long-Term Debt

To repair your credit and avoid past mistakes, don't take on any substantial debt. Try to buy items with cash as much as possible, rather than credit cards or loans, and delay major purchases until you've improved your credit score. If you do buy on credit, pay it off in full when the payment comes due.

3. Pay All Your Accounts on Time

bankruptcy

If you don't pay a bill on time, it'll affect your credit score. To get back on the road to financial health, be sure to pay all of your accounts on time, including rent, taxes, and utility bills. Set up a reminder system, so you get a notification a few days before you need to submit a payment.

4. Establish a Fresh Credit History

Since credit is necessary for many significant purchases and investments, you'll need to demonstrate positive financial behavior. Luckily, there are a few ways to re-establish your credit history after bankruptcy. Retail credit cards are abundant, but they can come with high interest rates that might pose problems in the future. Get into the habit of using a credit card responsibly by signing up for a secured card or becoming an authorized user on a family member's account. A credit builder loan that uses property as collateral can also be an effective alternative if you need to fund a one-time purchase.

5. Check Your Credit Score

Once you start rebuilding your credit, you want it to be reflected accurately on your credit score. Check with credit reporting agencies to assure your bankruptcy date is correct, and that discharged accounts have $0 balances. Then, regularly check your credit score to make sure there are no errors going forward.

 

If you’re ready to file for bankruptcy, the attorneys at Upstate Legal Center of John V. Shepard in Rochester, NY, can answer your questions and guide you through the process. They have 30 years of experience serving residents throughout Rochester and Monroe counties, offering reasonable rates and free initial consultations. Call them today at (585) 429-5422 to discuss your situation, and get more information about their services on their website.

tracking