Rebuilding Your Credit

Rebuilding Your Credit

One of the first questions I am asked by the thousands of clients I have helped over the past 35 years as a bankruptcy attorney in Worcester is:

“WILL I BE ABLE TO GET CREDIT AFTER I HAVE FILED BANKRUPTCY?”

The answer is yes. But, you will have to earn it back.

The following is a short synopsis of why you can re-establish your credit and what you must do to overcome the impact of filing bankruptcy.

Reasons why your Credit Score WILL Improve:

  • Remember, after you file bankruptcy, you will not be able to rep-file bankruptcy for another 8 years. Therefore, you become a better credit risk for having filed bankruptcy.
  • You have no other unsecured creditors who could attack your house and wages or repossess your cars.
  • You have obviously learned the lesson of bankruptcy, regardless of how unpleasant the experience was.
  • With our expertise, you will have learned to budget your expenditures.
    • We will provide you with a fresh look at your expenditure, training you to avoid the pitfalls of failing to effectively budget yourself.
    • Hand in hand with such a lesson, you will have  a new-found commitment to financial discipline.
  • Finally, as a testament to the times we live in, with so many others in your position having filed bankruptcy, the lenders have come to see that in order for them to survive, they have to lend to those without perfect credit.

Below is a list of practical steps for you to take in order to re-establish your credit score. This battle is not unlike regaining your good name. It takes discipline and a positive attitude in the face of adversity in reaching this very obtainable goal in a short time. In fact, the FREE credit bureau report that you will receive when you meet with us during your INITIAL FREE CONSULTATION will show you the projected improvement in your score just by filing bankruptcy.

The Steps to Improve your Credit Score:

If you have a credit card with no balance on it and it is not tied to another card with a balance that you are going to list on your bankruptcy petition, then keeping that card and paying the credit on time will help a great deal.

  • Pay on time.
  • Do not max out the card or any other one you are able to obtain.
  • Used a secured credit card with a relatively small balance.
  • Avoid the high interest credit card that you will be send immediately after your discharge enters (At a 33% rate you will get cards sent to you after your discharge enters because the credit card companies recognize that you are a better credit risk after having filed bankruptcy.)
  • Use only 30% of your credit limit.
  • Pay off the balance in full early every month.
  • Make sure that the credit card or other credit that you receive reports to all three credit bureau agencies so that your efforts in establishing your good name and credit go recognized.
  • See if you can get someone with good credit to co-sign a loan or an auto loan for you so you can use that credit for a larger sum to bolsten your credit score and good name after bankruptcy even faster.
  • Pay off utility bills on time, every time, to rebuild your credit score and good name as soon as possible.
  • Get a reputable credit management online service to monitor your credit score. Use their advice to ensure you are working on improving your score every time you get credit or need to take steps to cure any defaults. We recommend Creditkarma.com
  • Make sure that all of your discharged debts are listed on all three credit bureau scores as “included in bankruptcy” to make sure they are not seen as still owing.
  • Pay your student loans in a timely manner.