One of the most common myths about bankruptcy is that filing will permanently destroy your credit rating. This fear a major reason why many people who could benefit from bankruptcy do not file. It is important to remember that there is no such thing as a “permanent credit score.” Your credit rating after bankruptcy can improve if your financial situation remains stable.
How Can You Improve Your Credit Rating After Bankruptcy?
There are multiple ways you can improve your credit score after your debts are discharged in bankruptcy. However, the most important factor is ensuring your financial situation reflects stability.
- Pay all bills on time: Depending on your situation, you may have property that is exempt from your bankruptcy estate, or saved through other mechanisms. Continue to make timely payments on these assets after filing. Make timely payments on rent, utilities and other bills. It is important to maintain steady employment or income to meet these goals.
- Check your credit report: You can receive one free annual credit report from Equifax, TransUnion and Experian. Check your report for errors or signs of identity theft.
- Show stability: You can show stability by holding down the same job or living at the same residence for a long period of time. This shows that you have a reliable source of income and make timely payments on your bills, rent or mortgage.
Credit scores pale in comparison to the prospect of having your wages garnished, your vehicle seized or your home foreclosed upon. If you are facing these scenarios, your credit score is not as important as you may think. Waiting to file for bankruptcy may be a costly mistake with long-term consequences.
The Kansas City bankruptcy attorneys at The Sader Law Firm are dedicated to helping people find solutions for difficult financial situations. Our attorneys can help you look at options for saving your home, vehicle and other important assets. Continue exploring our website to see if you qualify for $0 up-front Chapter 13 filing.