Lancaster Rebuilding Credit Lawyers
It’s no secret that filing for bankruptcy will ruin a person’s credit. The bankruptcy is reported to all credit bureaus, and your score will probably drop 400 points or more points—sometimes by a lot more. Unfortunately, a bankruptcy will also stay on your credit report for up to 10 years. What can you do?
Fortunately, as our Lancaster debt relief lawyer explains, you can get to work on boosting your score right away. No one should decline to file for bankruptcy protection simply out of fear of tanking credit. It’s possible to have a strong score in as little as two or three years.
Steps to Take to Boost Your Credit
At Wadhwani & Shanfeld, we have helped over 25,000 people file for bankruptcy, and we have discussed strategies for rebuilding credit with many of them. Here are the best techniques for supercharging your credit after bankruptcy:
1. Budget realistically. If you don’t live within your means, then bankruptcy will be nothing more than a temporary solution. The first step to improving your credit is to make a realistic budget, which might include deep cuts to certain expenses like housing or require that you take a second job.
2. Start small. You probably can’t get an unsecured credit card immediately after bankruptcy. But you might get a secured credit card. A secured card requires that you put down a deposit, which acts as security in the event you default. Secured cards have low limits, usually less than $1,000, but they are a good way to show you can start using credit responsibly. Or you could take out a credit builder’s loan with a nearby credit union. Whatever you do, make sure that you make monthly payments on time.
3. Report monthly payments. Regular, on-time payments boost your credit score; unfortunately, many monthly bills don’t get reported to credit bureaus. Anyone who has utility or rent payments should sign up for Experian Boost or a similar service so that positive payments are reported regularly.
4. Build slowly. After 18 months or so, you might actually qualify for an unsecured credit card. We recommend accepting an offer and using the card responsibly. Don’t buy anything on credit you can’t pay off with cash. Pay on time and pay off the balance each month.
5. Avoid payday loans. You might find that a payday lender is eager to lend, regardless of your bankruptcy. You need to avoid them. Payday loans have crazy interest rates, and if you are sticking to a realistic budget, there’s no reason to take one.
After a couple years, many people who file for bankruptcy see their scores rise into the mid-600s or even the 700s. Even though the bankruptcy hasn’t fallen off their credit report, its negative impact lessens over time.
Your Trusted Bankruptcy Attorneys
Many of our clients report feeling relieved when they file. “I should have done this earlier!” is a common sentiment. Call our firm to discuss your finances with our Lancaster rebuilding credit after bankruptcy attorney. There is no reason to delay.