Ways You Can Rebuild Your Credit after a Bankruptcy Filing

Tips for Rebuilding Your Credit after Bankruptcy

A bankruptcy filing need not permanently ruin your credit. In fact, in many instances, it will be perceived by potential lenders as a positive sign, that you are taking steps to resolve your problems. Most important, though, is that lenders tend to focus on what you have done after filing for bankruptcy. You can take steps to slowly rebuild your credit score. Here are specific measures you can take:

  • Get a copy of your credit report, so that you know everything that appears on it, and know that it is accurate.
  • If you do not have bank accounts, open both a checking and savings account
  • If you can’t get a regular credit card, set up a secured credit card. With this type of card, you make a deposit that becomes your credit limit. You must still make payments on a monthly basis. Ask your banker/lender on a quarterly basis whether you may be eligible for an unsecured card.
  • Pay all your bills as quickly as possible, but no later than the due date. If you absolutely cannot pay a bill by the due date, call the creditor to ask for a forbearance or to set up a payment plan.
  • Apply for a gas or store credit card. Often, these cards are easier to obtain, and will have very low credit ceilings, so you can’t get in over your head.
  • Don’t charge any more than you can pay off every month. You will pay significant fees if you carry a balance on a credit card. In addition, there is a boost to your credit score when you pay off your balance every month. Use your credit to pay only for non-essentials. Pay for all necessary items—food, shelter, utilities, gasoline—with cash or a debit card from your checking account.
  • Budget for everything and stay within the budget. For large ticket items, try to set aside money every month until you can pay cash for those items.
  • Tithe to yourself. Take 10% of your take-home pay and put it in a savings account. This will allow you to have something set aside for contingencies, so that you don’t have to go into debt.
  • Avoid debt consolidation offers, debt management companies or finance companies.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.