Credit After Bankruptcy

Filing for bankruptcy can challenge many aspects of a person’s self esteem from responsibility issues to social standing. So many questions and concerns arise after bankruptcy that it can leave even the most financially savvy in the dark as to what to do or how to proceed to repair credit score after bankruptcy. It would serve no one to say that bankruptcy won’t hurt your credit standing, but it may not be as severe as you might think.

• Do you or someone you know need to re-establish credit after bankruptcy? If so, contact a bankruptcy attorney today to discuss your options for credit after bankruptcy!

Tips to re-establish your credit

• Correct any errors in your credit report.
• Write letters to the credit reporting agencies explaining your bankruptcy filing.
• Talk to your banker to let them know you are trying to restore your credit.
• Open a savings account and contribute to it habitually.
• Try to pay any outstanding debt as fast as possible.
• Pay your regular household and other bills on time.
• Pay your reaffirmed, pre-bankruptcy debts on time.
• Take out a small loan or a secured credit card with small limit.
• Stay away from high interest credit traps such as payday loans.
• Do not apply for multiple credit cards or open credit.
• Try not to increase your debt to income ratio.

You will get credit offers after your bankruptcy is finalized. Some will have a ridiculously high interest rate, a high annual fee or require a secured amount placed in a savings account, but if you wait you will start to see more competitive offers after time goes on and the more responsible you are, the more credit or reduction of interest rate you will be able to negotiate from the issuing company. Sound familiar? You will be starting all over again. Sit down and honestly consider what your maintainable credit is at this time and try not to accept every credit offer you get. This will go a long way in your quest to improve credit score. The more you hold out the better it will be for you in the end.

The truth is that we are in a very competitive financial and credit market and banks and creditors look more deeply at the stability of your income, your ability to make timely payments, your debt to income ratio, and payment history since or prior to your bankruptcy more than the fact of your filing. Let’s face it, anyone can find themselves in financial hardship for a myriad of reasons and lenders realize that. In some cases lenders might see you as less of a risk after bankruptcy. In the bigger picture your bankruptcy filing will be less damaging than a poor payment history. It does help immensely if you had a good credit standing before you filed. A bankruptcy is not going to erase the record of your debts listed in your bankruptcy. Credit reporting agencies have the right to show an accurate history of your financial records.

Do you or some you know need to reestablish credit after bankruptcy? Contact a bankruptcy attorney today to discuss your options for credit after bankruptcy!

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