Many people who are filing for bankruptcy are scared it will be impossible to rebuild good credit. Fortunately, this fear is unfounded and opportunities to rebuild credit can be found soon after filing for bankruptcy. There is no such thing as a “permanent” credit rating. Here are some ways to strengthen your credit score after filing bankruptcy:
- Secured credit cards can be a good option for rebuilding credit after bankruptcy. These credit cards require a deposit, usually anywhere from 25 to 100 percent of the limit. For example, a secured credit card with a $400 limit might require a 50 percent deposit of $200. By making timely payments for a year or more, your credit score will likely start to climb.
- Pull your credit reports often to catch mistakes. Catching errors can become an essential step in repairing credit worthiness.
- Avoid applying for too much credit. After filing for bankruptcy, it is important to take baby steps so it is easier to make payments on time. Applying for and receiving too many loans can make it appear you are having financial difficulties.
- Build a savings account for emergencies. Having a savings account can reduce a reliance on credit in the event of job loss or other unforeseen expenses.
Does It Take 10 Years To Rebuild Credit After Filing For Bankruptcy?
It is a common misconception to believe bankruptcy can cause extensive damage to credit scores for 10 years. By building good financial habits, such as making timely payments every month, it is possible to rebuild credit after bankruptcy. It does not have to take a decade to secure credit worthiness again.
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The Sader Law Firm – Kansas City Bankruptcy Attorneys