Los Angeles Rebuilding Credit Lawyers
A bankruptcy can tank any person’s credit. How far you fall will depend on your credit before filing. Someone with perfect credit before filing can tumble 400 or more points. But even those with multiple collection accounts will see a substantial drop. Is it possible to ever come back from a fall like that?
The answer is “yes.” At Wadhwani & Shanfeld, we have worked with countless clients seeking bankruptcy protection. Many of them ask about whether they can rebuild credit. Our Los Angeles rebuilding credit lawyer has the following tips for how to climb your way back out of the hole you have fallen into.
Five Steps to Take
Anyone committed to improving their credit can take these steps following bankruptcy:
1. Set a budget and stick to it. Credit repair will fail if you fall behind on bills and debts in the future. So you absolutely must create a realistic budget that works with your income and then stick with it. If you don’t make enough money for your lifestyle, you need to downgrade or gain additional income.
2. Get a secured credit card. A secured card is like any other credit card, except you make a deposit with the issuer, usually $500 or so. That represents your credit limit. You then use the card like you would an unsecured card—don’t go over the limit and pay your bill each month. This is not a debit card. The deposit provides protection to the issuer in the event you default.
3. Pay all your debts on time. Some debts might have survived bankruptcy. Remember to pay them in a timely fashion and don’t fall behind. Also pay your utilities and other expenses.
4. Seek out a credit builder loan. This is a special type of loan offered by certain banks and credit unions. They deposit the amount into an account—let’s say $500. You then make payments to the bank every month. Once you have paid the loan, you gain access to the $500. The benefit of a credit builder loan is that the lender reports your payments to the credit reporting agencies.
5. Report other payments to Experian. This credit bureau lets you report payments for things like rent and utilities. Timely payments help build your credit score.
Once your credit profile improves, you will start receiving offers for unsecured credit cards. You should only sign up for one if you can use it responsibly. However, regular use and full monthly payments can juice your credit score, taking you to the next level. All in all, many of our clients improve their credit in as little as three years. A new car or even a home mortgage can’t be far behind.
Want More Tips? Call Us
Our Los Angeles rebuilding credit after bankruptcy lawyers are proud to help indebted consumers get rid of burdensome debt and start building for the future. We can discuss bankruptcy as a possible solution to your debt problems in a consultation.