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Credit after Bankruptcy

If you have ever filed for bankruptcy you understand what a financial and social setback that can be. So many issues and anxieties come up after a bankruptcy filing that it can leave us in the dark as to what to do or how to improve and reestablish our credit after. Bankruptcy will hurt your credit standing, but it may not be as severe as you might think. Credit is possible fairly quickly after your bankruptcy is finalized, either through secured or even unsecured credit.

Do you or some you know need help in restoring credit after bankruptcy? Contact a bankruptcy attorney today to talk about your options for credit after bankruptcy!

You will be bombarded with credit offers as soon as your bankruptcy is finalized. Some will have an unreasonably high interest rate, a high annual fee or require a secured amount placed in a savings account. Wait long enough and you will start to see more competitive offers come your way. If you are responsible with your new credit you will soon see more reasonable interest rates. You will be starting to build your credit all over again. Consider making a budget and sticking to it to keep your income to expense ratio in balance and keep your goals realistic.

Some tips to help you restore your credit:

• Correct any errors in your credit report.
• Write letters to the credit reporting agencies explaining your bankruptcy filing.
• Talk to your banker to let them know you are trying to restore your credit.
• Open a savings account and contribute to it habitually.
• Try to pay any outstanding debt as fast as possible.
• Pay your regular household and other bills on time.
• Pay your reaffirmed, pre-bankruptcy debts on time.
• Take out a small loan or a secured credit card with small limit.
• Stay away from high interest credit traps such as payday loans.
• Do not apply for multiple credit cards or open credit.
• Try not to increase your debt to income ratio.  

We are in a very competitive financial and credit market and banks and creditors look more deeply at the solidity of your income, your ability to make timely payments, your debt to income ratio, and payment history since or prior to your bankruptcy more than the fact of your filing. Let’s face it, anyone can find themselves in financial destitution for a countless reasons and lenders realize that. In some cases lenders might see you as less of a risk after bankruptcy. Your bankruptcy will be less harmful than a poor payment history. It does help immeasurably if you had a good credit standing before you filed.

Do you or some you know need help in restoring credit after bankruptcy? Contact a bankruptcy attorney today to talk about your options for credit after bankruptcy!

Article written by Juan Carlos Villamil contributing staff writer for SWI Digital, Inc.