Repairing Your Credit after Bankruptcy
Bankruptcy can be start of a brand new financial future. It can bring relief from creditor harassment, garnishment, lawsuits, and overwhelming debt. It can provide individuals with the opportunity to take positive steps in the right direction, by budgeting, saving, and rebuilding credit. It is important to repair your credit after bankruptcy. Your credit score can be affected by the financial situation that led up to bankruptcy as much as by the filing. At Joseph P. Doyle, our knowledgeable Dupage County bankruptcy lawyers will advise you about improving your credit standing.
Repairing Your Credit after Bankruptcy: Credit Tips
Below are some tips on rebuilding credit after bankruptcy.
- Pay your bills on time to rebuild credit. Your payment history is 35% of your credit score.
- Apply for a credit card. You may have to accept a secured card and pay a deposit to begin with. It is not necessary to carry a balance on the card in order to build credit. You can pay the bill in full each month.
- Take out a loan a few years after bankruptcy. You might consider a line of credit or car loan, but make sure it is affordable. Shop around for the best interest rate. Your interest rates will go lower as your credit score goes higher.
- Stay well below your limit on any credit card.
- Do not close credit accounts. It reduces the amount of your available credit and lowers your score. If you do not want the temptation to use the credit, you can cut up the card.
Know Your Credit Score
When you apply for a loan, the lender looks at your credit history and credit score. Many lenders use FICO scores. When you file bankruptcy, your FICO score will be low initially, until you start rebuilding credit. The first step you should take is to get copies of your credit reports. You are entitled to one free copy per year from Equifax, Experian, and TransUnion, which you can find online.
Contact our Dupage County bankruptcy lawyers for expert assistance in bankruptcy.