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Post-bankruptcy steps to rebuild credit score

On Behalf of | Jun 17, 2024 | Bankruptcy Law

According to recent data, Americans in their 30s have an average debt of $26,532. These 30-somethings might be juggling their student loans, mortgages or unexpected medical bills along with their daily expenses. When financial pressures lead you to consider bankruptcy, it is natural to worry about the future and ask, “Can I ever rebuild my credit to a decent state again?”

Fortunately, yes, it is indeed possible. Bankruptcy provides relief – through liquidation or repayment plans – when debts become unmanageable. While it can damage your credit, recovering from it and starting anew is possible. Here are some practical steps to help you regain your financial confidence and creditworthiness.

Understand your credit report

Start by getting a copy of your credit report from the three major credit bureaus (Equifax, Experian and TransUnion). Understand the entries, especially those related to your bankruptcy. Check for any inaccuracies and dispute them if necessary.

Consider a secured credit card

Consider getting a secured credit card instead of a regular credit card. It is a special type of credit card requiring a deposit, which becomes your credit limit. When you responsibly use your secured credit card, it can help you improve your credit score over time.

Make timely payments

Always pay your bills on time. Timely payments demonstrate financial responsibility and can significantly improve your credit score.

Seek professional help

The world of credit can be complex, especially after bankruptcy. But you do not have to be afraid. When you find yourself lost in this complicated terrain, consider seeking the guidance of legal professionals experienced in bankruptcy. They can help you understand the legal implications of your unique situation and ensure you are on the right track to rebuilding your credit.

While bankruptcy can significantly impact your credit, it does not mean you cannot get decent credit again. Rebuilding credit after bankruptcy takes time. But with the right strategies and support, you can rebuild your credit and secure a stable financial future.