Bankruptcy is an effective tool for helping you regain financial footing after a difficult financial struggle. It is a process that allows you to organize your debt and in some cases, alleviate certain types of debt completely. Bankruptcy is temporary and once your bankruptcy is discharged, you will need to take action to re-establish your standing in the financial world. This process begins during your bankruptcy and continues in the months and years following the discharge.
What are some of the most important steps you can take to build your credit following a bankruptcy?
As you might have guessed, the most important thing you can do is avoid the financial mistakes that led to your bankruptcy. Wise financial decisions require careful planning and financial restraint. Though some financial hardship is unavoidable, smart choices make it easier to rebuild your financial standing.
Prove You Can Handle Debt
If you were allowed to keep your home and car during your bankruptcy and you have a mortgage and/or car loan, it is essential you keep up with these payments during your bankruptcy. Make sure you speak with your bankruptcy attorney and the bankruptcy court about the amount you owe on these personal possessions. These loans are a good tool for helping you rebuild credit and if you are lucky enough to keep them during bankruptcy, do not take the situation for granted.
Secured credit cards can be somewhat controversial, but they can help you re-establish credit. In order to use a secured card, you must first deposit a payment to the card company. Make sure any secured card you use reports to all three national credit bureaus on a monthly basis so your efforts are not wasted. Use the card sparingly and keep any balance as low as possible on the card.
When you begin to receive regular credit card offers again after your bankruptcy, apply for the one that offers the best rate and terms. You will no longer need the secured card and can use this standard card to help you build credit. Again, make sure payments are made on time and keep the balance low.
Stay on Top of Your Credit Status When You Build Credit
Finally, periodically check your credit information to ensure it is accurate. You can request a copy of your credit report from each of the three national credit bureaus one time per year for free. As someone rebuilding after bankruptcy, you might want to check your reports more frequently in the first few years you are getting back on your feet.
The bankruptcy discharge should appear on your credit reports within 60 days. If it does not you should contact the reporting agency and request an update. Also, make sure you dispute anything erroneously listed on your report.
Are you facing a financial struggle? It is possible to get back on your feet and rebuild your life. Contact the Law Offices of Robert M. Geller at 813.254.5696 for help managing your situation and making choices that will help you have a brighter financial future. The Law Offices of Robert M. Geller, P.A. offers a credit education program after a bankruptcy discharge to all of their clients. In many cases this program will teach you how do get back to a 720 score in 12 to 24 months.