Filing for bankruptcy in Washington or Oregon is a means to give yourself a fresh start after being overwhelmed by unmanageable debt. Many people think that debtors who filed for bankruptcy will have a hard time rebuilding their credit, especially people with bad credit scores even before filing bankruptcy. However, there are ways to increase your credit score despite having a bad credit history. In this article, you’ll learn how to improve and rebuild your credit wisely.
While it is true that a bankruptcy stays on your credit report for up to 10 years, improving your credit score is not impossible. Its effect on your credit standing lessens over time, and it is also more likely that you already have bad credit even before your bankruptcy filing. Also, your credit score after bankruptcy may not be as bad as you think; your credit scores may even be higher a year or two after bankruptcy than before filing. Connect with a bankruptcy attorney in Washington & Oregon to know how you can repair your credit after a bankruptcy.
So whether you filed a Chapter 7 or a Chapter 13, it is best to begin planning right away how to improve your credit score and start planning how you can avoid getting another bad credit score as soon as the bankruptcy case is over.
You might feel like a pariah in the eyes of credit card companies, credit card issuers, and lenders, but that can be changed. You just have to start building a good credit score and prove that you’re ready to take on financial obligations again. Show them that from having poor credit, you now have the best credit score after bankruptcy.
To start building credit and boost your score, you must exhibit actions that show you’re already capable of borrowing money, even in small amounts, and that you can pay your bills and loans promptly. Here are some tips you can do to repair your credit:
- Check your current credit score. A bankruptcy will reorganize or wipe out your debts, but it won’t wipe your credit reports clean. For most bankruptcies, it could stay on your report for almost 10 years, which will just wipe off after some time. It is important to check your credit report and score after bankruptcy as it will act as the baseline when you build your credit score. A credit bureau can give you a free credit report (you can get free credit scoring from three major credit bureaus in the country). Just make sure to get your credit checked frequently so you can monitor it properly.
- Get a Secured Credit Card. This is essentially the same as when you apply for a credit card, except this one is backed by the deposit you pay, and the credit limit is the amount of money you have on the deposit. A secured card is relatively safer to use than unsecured credit cards when trying to rebuild credit because you can only be charged for what you’ve already prepaid which can help avoid your interest rates and loans from piling up. To improve credit, especially if you have a low credit score, you can use it to pay bills. You can also make frequent loans on your new credit card, just make sure that you pay your credit card balances on time to get a high credit score and avoid getting credit problems.
- Consider asking someone to cosign a loan application. Getting someone with a good credit score to vouch for you and be willing to shoulder your loan should you miss any payments will greatly help your score. Asking someone to become a co-signer is a huge request, so you should be responsible when applying for a loan as it may lead you to another debt spiral and negatively affect your credit.
- Create a budget plan. If you’ve filed bankruptcy, then you must have attended credit counseling before getting a discharge. Creating a budget and monitoring your expenses will greatly help you manage your finances especially when paying bills, house mortgage, auto loans, and other expenses. By creating a budget you can also save for your emergency fund. Having even a few hundred dollars in savings for unexpected expenses can help you steer away from unplanned loans and overspending on your credit card.
- Apply for a checking account. Sometimes, individuals who apply for loans get rejected after creditors see that they’ve filed bankruptcy in their records, or have unpaid credit card debts. One alternative is getting a checking account and applying for a secured credit line through that account. This gives you a better chance of getting approved since you’re already their client.
If you want to know more about how to improve your credit once your bankruptcy petition is over, contact a Northwest Debt Relief bankruptcy attorney. Our Washington & Oregon bankruptcy attorneys can give you legal assistance to help you improve your credit profile and to get better credit scores. Contact us today and let us give you a fresh start.