Overwhelming debt creates financial hardships. The debt can control every aspect of people’s lives.
You may be able to rid yourself of this debt by filing for bankruptcy. Personal bankruptcy can give you a fresh start, so you can begin rebuilding your financial life. However, it’s important to know what to expect after your bankruptcy is complete. In this blog post, we will discuss how bankruptcy can affect your credit score.
Credit scores are very important for one’s ability to make future purchases. Having a lower credit score can hurt that ability. While it is true filing bankruptcy can hurt your credit score, it may not be as bad as you think. You can rebuild your credit score after bankruptcy and build it back to the place it was before or even higher.
Tips for rebuilding credit score after bankruptcy
There are some ways you can raise your credit scores more quickly. Some tips for rebuilding credit scores after bankruptcy are:
- Check credit reports to ensure that there is no information that is inaccurate or remained on your credit report after filing for bankruptcy.
- Obtain a secure loan. These are loans that people can receive only after depositing money as a backup for the loan. Making the payments on these loans can help rebuild your credit score.
- Obtain a secured credit. These are like secured loans, in that they are backed by a deposit. The purchase limits are usually the same as the amount deposited.
- Ask someone to co-sign on a loan or credit card. If you know someone who is willing to co-sign on a loan or credit card, the bank is more likely to agree and it allows you to start paying off credit to build their score.
- Become an authorized user on a credit card. If someone is not willing to co-sign on a credit card, becoming an authorized user can be a way to get credit and pay it off with little risk to the banks.
Filing for bankruptcy is a major decision that needs to be taken seriously. However, it may be the best way to allow you to achieve a fresh start. It could very well be worth it to you, even if it takes some time to rebuild your credit score afterwards. Experienced attorneys understand the bankruptcy process and may be able to guide you through the process.