Rebuilding Your Credit After Bankruptcy

Bankruptcy is a tool to eliminate overwhelming debt or to catch up on your secured debt. When you finish your bankruptcy case, your finances should be in a more manageable state. By removing your overwhelming debt, it creates an environment to make better financial habits. When you file for bankruptcy, that mark can remain on your credit report for ten years. Over time your credit score will improve when you can show your creditworthiness.

Managing Debt

Your creditworthiness will not improve overnight. Paying your bills on time and avoiding getting high-interest loans will look favorably on your credit report. Staying current in your housing, utilities, alimony, or child support and any other debt that you have will avoid putting more unfavorable marks on your credit report. By taking the credit counseling courses required by your bankruptcy case, implementing those good financial habits will help keep you out of financial trouble.

Offers of Easy Credit

Soon after you file bankruptcy, you may be surprised to be receiving offers of credit. These bad credit, no problem loans, will often come with very high interest. Giving in and obtaining these loans could quickly ruin your good financial habits. These lenders know that you will be unable to receive another bankruptcy discharge for seven years.

Getting New Credit

When you determine that your budget will allow for a big purchase loan, shop around for the best rates. Don’t assume that because there’s a bankruptcy on your credit report that you will not get favorable rates. There are lenders out there that will want your business no matter what your credit score is. Using credit responsibly will help rebuild your credit and improve your credit score.

If you need a fresh start and you are having financial issues contact a McAllen bankruptcy attorney today.