Tips on How to Repair Your Credit After Bankruptcy
Filing for bankruptcy in Mississippi is a means to give yourself a fresh start after being overwhelmed by unmanageable debt. It is a common misconception that individuals who filed for bankruptcy will have a hard time repairing their credit, especially for people who had 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, we’ll teach you how to improve your credit score and repair your credit wisely.
While it is true that most bankruptcies stay on your credit report for up to 10 years, getting a good credit score after bankruptcy isn’t 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 Jackson bankruptcy attorney to know how to repair your credit after bankruptcy.
No matter which type of bankruptcy you filed, whether it is a Chapter 7or Chapter 13, it is advantageous to begin planning right away on how to clean up your credit, improve credit scores, and how you can avoid getting another bad credit score as soon as the bankruptcy case is over.
Lenders and credit card companies may be reluctant to trust you again, but this could change, and fixing your credit is key. You just need to start rebuilding a good credit score, proving that you can take on financial responsibilities again.
To start getting better credit scores, you must show that you’re now competent enough to borrow money, even just a small amount of money, from lenders or banks. You must also show them that you can pay bills and loans on time.
Here are a few tips on how to repair your credit:
Check Your Credit Report Frequently
While a bankruptcy reorganizes or wipes out your debts, it may negatively affect your credit score. A bankruptcy filing will still be on your credit report, so you should check your credit report immediately after bankruptcy. Your credit score after bankruptcy will be the starting point once you start building credit, so you should get your credit score checked often. A credit bureau can give you a free credit report (three major credit reporting agencies can give you free credit scoring).
Apply for a Secured Credit Card
Getting a new credit card after bankruptcy is a great start to add scores to your credit. The easiest one that you can get is a secured credit card. Different from unsecured credit cards, a secured credit card has a deposit where you can charge your purchases, which means that your credit limit is only equivalent to the amount you’ve deposited on your account. Since you already have deposited money as the collateral for your loans, a secured credit card is ideal for people who are planning to improve credit, as it can help you responsibly manage your debts, avoid getting high interest rates, and keep your loans from blowing up. As you use it, your credit score also increases. To build credit, just make sure to use it frequently for monthly payments, even for small purchases, and to pay your bills.
Apply for a Checking Account
Sometimes, individuals who filed bankruptcy can have their loan application rejected after a bank or creditor sees their record of filing bankruptcy and unpaid debts from creditors. One way to go around this problem is to apply for a checking account and get a secured credit line through that account. This will give you a higher chance of getting approved since you’re already one of their clients.
Ask Someone To Co-sign a Loan Application with You
This may seem like a big ask, but to get a loan with someone (who has a good credit score), and getting that individual to vouch for you and willing to pay on your behalf should you miss any payments in the future, will greatly help in improving your score. However, while a co-signer is there to back you up in case you miss any payments, you are still the one responsible for making sure that you can pay the money owed on time to avoid high-interest rates and getting into another debt spiral.
Being allowed to start fresh after bankruptcy is a great privilege that you should utilize. A Jackson bankruptcy attorney can give you legal advice on how to improve your credit once your bankruptcy petition is over.
At The Rollins Law Firm, we have bankruptcy attorneys who can help you improve your credit profile and give you legal assistance to improve your credit score. Contact us today for a free consultation.
We serve clients throughout Mississippi including those in the following localities: Madison County including Canton, Madison, and Ridgeland; Forrest County including Hattiesburg and Petal; Warren County including Vicksburg; Lauderdale County including Meridian; Harrison County including Biloxi, Gulfport, Long Beach, Pass Christian, and Saucier; Hinds County including Clinton and Jackson; Jackson County including Moss Point, Ocean Springs, and Pascagoula; and Rankin County including Brandon, Florence, and Pearl.
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