So you made it through the bankruptcy proceeding and it probably was not as bad as you thought it would be. The bad news is that your credit is likely at its lowest point. The good news is that you now have clean slate, a fresh start. In addition, if you are patient and smart with your finances, you can put yourself back on track to having good credit. In addition to this article, speaking to an experienced Maryland bankruptcy attorney will help raise your credit score faster than you think.
While true that a Chapter 7 bankruptcy filing will remain on your credit report for 10 years, it is not the end of the world. By following some simple steps, you can rebuild your credit score in a relatively short amount of time.
How to Re-Build Your Credit after Bankruptcy
You will likely begin receiving credit offers not long after your bankruptcy. Accept these offers, but use the credit wisely. The credit limits will be low, often below $1000, and the interest rates will be on the higher end of the spectrum. Make small purchases each month, but do not go over-board. Most importantly, pay the monthly bill on time.
Along the same lines, pay all your bills on time after bankruptcy. Your unsecured debt is gone, but you are still responsible for secured debt. That means car loans, student loans and mortgages still have to be paid. Re-establish yourself as a responsible credit consumer by paying bills on time.
Next, order copies of your credit reports and take the time to examine them closely. It is not uncommon for credit reports to contain errors, and those errors will likely work against you. All three major credit bureaus, Trans Union, Experian and Equifax, should reflect your bankruptcy discharge. However, all your old delinquent accounts will remain for seven years from the date of delinquency.
Offers for secured credit cards will usually begin arriving in your mailbox after bankruptcy. Approach these with caution. These accounts require you to deposit a few hundred dollars in an account as security against your purchases. These come with high annual fees, high interest rates and a fee just to set-up the account. If you go this route, ask the card issuer if the card can be converted to unsecured after a period of on-time payments
Bankruptcy is not the end to your credit life, despite what you may have heard. Discuss your options with a Washington DC bankruptcy lawyer for more information on whether bankruptcy is the right option for you.