One of the main reasons people give for putting off bankruptcy is the fear that often doing so, they will never again be able to get decent, or any, credit. That is a lie. In fact, rebuilding credit after bankruptcy is actually pretty easy, and a whole lot easier than trying to rebuild credit before filing bankruptcy.
Your Credit After Bankruptcy
Filing bankruptcy actually doesn’t do damage to your credit. What really damages your credit is keeping unpaid debts on your accounts. By putting off filing bankruptcy, those debts of yours will continue to eat away at your credit like a parasite, slowly dwindling it down to absolute zero.
However, Chapter 7 bankruptcy can stop the bleeding, allowing you to start fresh. Soon, you’ll be rebuilding credit and even qualifying for loans and credit cards, if you so choose.
“Will I ever be able to buy a house after filing bankruptcy?” That is a very common question we get asked here. The short answer is “Yes, absolutely.” A year or so after the bankruptcy discharge, sometimes as soon as a few months, you could qualify for a home loan with pretty decent interest rates.
How Can I Rebuild Credit After Chapter 7 Bankruptcy?
After your bankruptcy discharge, all of those draining debts, wage garnishments, harassing phone calls, and everything else will be gone. You’ll find that you have more income to put in savings, you’ll be able to pay your bills on time, and you may even have a little extra after that.
If you want to really speed up the credit recovery process, though, here are a few tips and suggesting for getting on the fast track.
- Edit Your Credit – Get a copy of your credit report. Not long after your bankruptcy goes through, all of those unpaid debts should be wiped from your credit report. If after a few months, there are still any discharged debts on your report, call the creditors and remind them to erase those debts.
- Be Responsible – If you start getting approved for credit early on after bankruptcy, make sure that you are 100 percent responsible with it. That means paying the monthly bills on time, and in full. Just doing that can be a huge boost.
- Secured Credit Cards – Consider getting a secured credit card before moving back to that platinum credit card. A secured credit card requires you to put up some or all of the total spending limit as collateral when you get the card. That way, if you do run into some trouble down the line, you’re covered.
The key is to simply act responsibly. Don’t take on debts you can’t handle, and do your best to pay your bills on time and in full. Just doing that will help your credit soar like an eagle in no time.