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Sunday, August 30, 2020

Rebuilding Your Credit After Bankruptcy

Bankruptcy can sound intimidating. It can, however, be an important lifeline for those struggling with meeting outstanding debt obligations. One thing people you may hear when others caution you about bankruptcy is the hit to your credit that you will incur. This may not be as dire as others make it sound. The benefits of bankruptcy can change a person’s life. Credit can be rebuilt, especially when a concerted effort is made.

Rebuilding Your Credit After Bankruptcy

To set yourself up for a successful journey to better credit after bankruptcy, take a look at your credit report to see if your bankruptcy was accurately reported. While bankruptcy can cause your credit to take a serious hit, certain things about it can make it actually worse than it really is. For instance, check for whether debt is reflected as active or late when it should be shown as discharged. This type of error can lead to even more of a harmful impact on your credit.

There are several ways that you can rebuild your credit after bankruptcy. First, as you set out on your quest for better credit, be mindful that certain things can make you more eligible for getting access to credit. For instance, maintaining a stable job and avoiding job-hopping. Lenders will often be more likely to offer loans and lines of credit to those who can show a steady job history. It can increase a lenders confidence in your ability to pay your outstanding obligations, even after bankruptcy.

While gaining access to new lines of credit can be difficult after bankruptcy, it may not be impossible and you should try and apply for new credit. Getting new credit after bankruptcy can be a critical step in boosting your credit score as it gives you the opportunity to once again establish yourself as a reliable borrower that makes timely payments. You may only be able to get a credit line with higher interest rates and fees, but it could be worth it to see your credit score rise once again.

When you open up a new line of credit, be sure to keep up with your payments. You may even want to set up something such as automatic payments to make sure payments happen on time. Additionally, try to keep your balances lower. When you have a low credit utilization ratio, meaning you are using a smaller percentage of your overall available credit, lenders will have more confidence in you repaying what you owe.

Amidst all of these efforts to boost your credit, be mindful of things that may hurt your credit as well. For instance, be sure to remain up to date on payments for accounts that were not closed in bankruptcy. Bankruptcy can eliminate many debts, but some may not have been discharged. Student loan debt is rarely discharged in bankruptcy and alimony payments are not discharged as well. Remain current on your payments for these types of accounts to avoid hurting your credit as you work to rebuild it.

Miami Valley Bankruptcy Attorneys

Bankruptcy can give you a fresh financial start. Do not let the prospect of lowering your credit score prevent you from exploring the benefits that bankruptcy has to offer. Credit can be rebuilt. At Miami Valley Bankruptcy, we are here to answer your questions about bankruptcy, including those associated with life after bankruptcy. Contact us today.


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Miami Valley Bankruptcy, Brian Lusardi, Esq., assists clients with Bankruptcy matters including but not limited to: Common Myths, Cost of Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, The New Bankruptcy Law and Personal Bankruptcy in Xenia, Ohio, and the cities of: Wilberforce, Alpha, Spring Valley, Dayton, Bellbrook, Yellow Springs, Cedarville, Fairborn and Clifton; and the counties of Greene and Montgomery.



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