Rebuilding Your Credit After Bankruptcy
A person’s credit score is generally based on his or her most recent financial transactions. This is good news if you are interested in rebuilding your credit after bankruptcy. If you are careful in using the credit that you do have after bankruptcy, you can begin to rebuild your score in a fairly rapid fashion. (Note: Using your credit is very different from simply avoiding credit. You must take active steps to regain a solid score, not simply avoid credit cards and loans altogether.)
At The Bruntz Law Firm, LLC, we help Colorado clients throughout Parker and Douglas counties to regain control of their finances and their futures. Attorney Damon Bruntz has helped numerous individuals and families to discharge their debt and start fresh.
Even though the bankruptcy will remain on a person’s credit record for seven years, many people can regain a credit score between 700 and 750 within two to three years.
Using Timely Car Payments, Secured Credit Cards And More
The first and most important thing you can do to rebuild credit is to avoid any type of financial decisions that contributed to the original predicament. For instance, if you never used a budget before, now is the time to create one and stick to it.
It’s also helpful to understand how credit card companies use algorithms to determine if you have good or bad credit. In general, you will be given a low credit score if you have too much debt in relation to your income level, you keep a high balance on your card and you fail to make payments on time. To rebuild your credit, simply do the opposite:
- Keep your debt level small in relation to your income
- Keep a low balance on your credit card
- Make payments on time every month
Secured credit cars, car loans and house mortgages are all good places to start to rebuild credit. By paying your existing obligations on time, you are proving that you can be trusted for new loans.
Learn More About Debt Relief
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.