How to Rebuild Your Credit After Bankruptcy
On Behalf of O’Brien Law Firm, LLC
Posted on: April 11, 2023
Bankruptcy can have a lasting effect on your credit score and future borrowing options. But with time, effort, and careful planning, it’s possible to rebuild your credit after bankruptcy. Here are some strategies for doing so.
- Get a Secured Credit Card
A secured credit card requires a security deposit, which becomes the card’s credit limit. These cards tend to be easier to acquire after bankruptcy and can help you start rebuilding your credit. Remember to use the card responsibly: this means making small purchases and then paying off the balance in full every month.
- Be Punctual with Bill Payments
Scheduling automatic payments or reminders is one of the most essential steps you can take to rebuilding your credit after bankruptcy. Late payments have a major negative effect on your score, so make sure to never miss one.
- Monitor Your Credit Report
It is essential to regularly review your credit report for errors or inaccuracies that could be harming your score. Each year, you are entitled to one free report from each major reporting agency; review it thoroughly and dispute any mistakes or inaccuracies you find.
- Maintain Your Credit Utilization Low
Credit utilization refers to the amount of credit used compared to what is available, so keeping it low is key when rebuilding after bankruptcy. Aim to keep your utilization percentage below 30% when building after bankruptcy.
- Consider a Credit Builder Loan
A credit builder loan is an option designed to assist those with poor credit in rebuilding their credit scores. With this type of loan, the lender deposits the money into a savings account, and you make payments towards it every month. Upon repayment, you receive all funds in your savings account plus any interest earned during the duration of the loan.
- Have Patience
Rebuilding your credit after bankruptcy takes time and patience. It may take years to fully recover and rebuild your score again, so be patient and persistent in your efforts to improve it.
If you need help rebuilding your credit after bankruptcy or have questions about bankruptcy law, reach out to The O’Brien Law Firm today. Our knowledgeable attorneys can offer guidance and support through every step of the complex legal process so that you can get back on track financially.