Bankruptcy is a difficult decision, but it is the best option for many who are facing financial crisis. Bankruptcy has a negative stigma attached to it, but it can actually be a new beginning for someone who is struggling. It can end that feeling of drowning in debt and allow you to get control of your financial future. Filing gives you a fresh start and an opportunity to begin rebuilding your credit and moving forward financially. Eventually, you will receive your bankruptcy discharge and be eligible to begin again.
These three tips for improving your financial situation and boosting your credit score after the discharge can help you get started on the right foot following your bankruptcy:
Apply for a Secured Credit Card
Secured cards require a down payment, so they are “safe” cards, but they are still listed on your credit report. If you establish a secured card with a $1,000 balance, your credit report will show that you have access to $1,000. This helps boost your score.
Some experts recommend getting more than one secured credit card. If you have the money to apply for this many cards and you are comfortable doing so, it can help your score to have access to higher amounts of money. However, you need to be careful how you use the cards. Despite their being secured, you can still abuse the cards. Use your secured cards carefully and view them as a tool to help you spend responsibly following bankruptcy. Ideally, you will pay off the balance each month. Try to use the cards for only small purchases and never carry a balance. This lowers your credit score and defeats the purpose of having the cards.
Monitor Your Credit Report
Request a copy of your report from all three major credit bureaus every six months. Ensure that everything discharged in the bankruptcy has been deleted. Also make sure no other mistakes show up on any of the reports. The last thing you need after a bankruptcy is an erroneous listing on your report.
Even after your bankruptcy filing is long behind you, it is important to continue checking your credit report. Mistakes happen and you need to be sure your credit score is not affected.
Request Settled Debts be Eliminated from Your Report
If you choose to settle any debts not discharged in your bankruptcy, see if the creditor will remove it from your report. Usually a settled debt remains on your report and affects your credit. Even if it is paid off it can still hurt your score. In some cases, your score will be lower because of the listing. If you can negotiate the item be removed from your report, do so.
If you are considering bankruptcy and you have questions about the process or the aftermath, our experienced bankruptcy lawyers can help. Contact the Law Office of Brian R. Lewis for more information.