Ways to Reestablish Your Credit Rating After Bankruptcy

Bankruptcy is intended to offer a fresh start, which includes restoring your ability to obtain credit. Your credit score will take a hit after you file for bankruptcy, but this setback need not be long-term. Although bankruptcy can remain on your credit report for up to 10 years, it may be possible to decrease the impact of bankruptcy in just a few months. You can begin rebuilding your credit right away by taking these actions:

1. Review your credit report regularly — Knowing what affects your credit score can help you identify where you need to make improvements. You should also be on the alert for any mistakes and inaccuracies in your credit report. These should be disputed immediately with the credit bureaus to avoid any further negative impact. Checking your score regularly can also keep you motivated to continue improving your credit habits.
2. Create a budget — One of the best ways to get back on track financially is to budget your expenses. Failure to stay within a budget may have been the reason the debt became unmanageable in the first place. By creating a budget, listing where your money is spent and identifying where you overspend, you can avoid making the same mistakes you did in the past.
3. Find a co-signer — If you are unable to secure a loan after you have filed for bankruptcy, a co-signer may help you qualify. A co-signer agrees to take responsibility for paying back a loan, even if the other borrower defaults. However, you should be aware that your co-signer is fully liable on your loan. If you fail to make payments on time, the co-signer’s credit score is also damaged.
4. Become an authorized user — If it isn’t possible to get a co-signer, you might consider asking a relative or close friend to be an authorized user of their credit card. This will allow you to obtain a card in your own name, even though it is attached to the other person’s credit account. This arrangement may require giving that person a form of collateral and perhaps a monetary incentive. However, your credit score benefits from the account payments being made on time.
5. Obtain a secured credit card — You can apply to a bank for a credit card that is secured by a deposit and that limits charges to the deposit amount. Although these types of cards may have high interest rates, making prompt payments helps you demonstrate good credit behavior. Some secured cards can be converted to an unsecured card after you establish a sufficient history of on-time payments.

Getting back on a solid financial footing after bankruptcy can be challenging. It’s best to seek guidance from an experienced attorney. Jeff Field & Associates assists clients in the Atlanta metropolitan area with all aspects of debt relief. We have offices in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale. To schedule an appointment, call 404-381-1278 or contact us online.