When you are struggling to meet your financial obligations, you may resist the decision to seek protection under the federal bankruptcy laws, fearing that your credit will be permanently ruined. While there’s no question that your credit rating will temporarily decline, there is credit life after bankruptcy. It is possible to rebuild your credit and, in fact, you may be considered for some types of credit after a fairly short period of time.
One of the important things to remember is that most creditors view your credit score as only one component of your potential creditworthiness. If there’s strong evidence that your financial problems were an anomaly, or that there was an unexpected or explainable situation—such as medical bills or a divorce—a creditor may be more inclined to extend you credit. In addition, you can expect a potential creditor to take a close look at what you have done since your bankruptcy filing. Have you honored all your financial commitments in a timely manner? Is there an indication that you’ve either learned to manage your finances or that the situation that caused the bankruptcy filing was atypical?
You can, though, take positive steps to enhance your creditworthiness and to ensure that creditors have an accurate picture of your qualifications:
- Monitor your credit report on a regular basis—at least once a year—to make certain there are no errors and all information is accurate
- Pay your bills as early as you can, but always by the due date
- Apply for a secured credit card, pay it on a timely basis, and ask the issuer to report your payments to all credit reporting agencies
- Apply for a small loan after 18-24 months—perhaps a vehicle loan—and make the payments in a timely manner
- DO NOT CLOSE existing accounts—that will usually lower your credit score
Contact Heath, TX Bankruptcy Attorney Carrie Weir
I provide a free initial consultation to anyone with questions or concerns regarding a bankruptcy filing. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.
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