Rebuilding Credit after Bankruptcy
Many people assume that after filing bankruptcy one's credit will essentially be ruined for ten years. While it is true that the bankruptcy may remain on a credit report for this long, credit can be established in the interim. A College Station bankruptcy lawyer can help you plan for the rebuilding of credit after a bankruptcy.
A College Station bankruptcy lawyer Offers Tips for Rebuilding Credit
As your College Station bankruptcy lawyer will suggest, the fear of losing the ability to have credit should not dissuade you from filing bankruptcy. Indeed, filing is generally a healthy sign that you are finally coming to terms with the reality of the situation and trying to change it.
Here are some tips your College Station bankruptcy lawyer will suggest for rebuilding credit:
- Pay Your Bills: Make sure you pay bills on time. This is a fresh start, so do things correctly from the beginning.
- Open an Account with a Bank: Along with paying bills in a timely manner, maintaining a sound bank account and not defaulting on checks shows potential creditors that you are being responsible.
- Obtain a Secured Credit Card: The idea of actually having a credit card again may seem a pipe dream to a person who has filed bankruptcy, but the reality is that often credit scores improve significantly after 1 ½ to 2 years. A secured credit card is a great way to show that you can responsibly handle credit. As a College Station bankruptcy lawyer will explain, certain banks will allow you to put an amount of cash in “trust,” so to speak, and they will issue a card for that amount of credit. They are protected from default this way.
- Get a Secured Bank Loan: Once you show a bank that you can manage a savings and checking account, speak with a representative about a secured bank loan. This works much like the secured credit card. You place, say, $500 in a holding account and the bank provides you credit in that amount. You basically are borrowing from yourself.
- Purchase a Car: As a College Station bankruptcy lawyer will tell you, purchasing a car is a solid credit-builder. Find a company that will give you a car loan.
The most important consideration when rebuilding credit is changing your relationship with money. If is often useful to work with a credit counselor or a College Station bankruptcy lawyer to help you learn how better to manage your money.